Financial News: U.S. Pending Home Sales Unexpectedly Pull Back Sharply

U.S. Pending Home Sales Unexpectedly Pull Back Sharply In July

08/29/2024 - 10:49:00 (RTTNews)

(RTTNews) - After reporting a sharp increase by pending home sales in the U.S. in the previous month, the National Association of Realtors released a report on Thursday unexpectedly showing a sharp pullback by pending home sales in the month of July.

NAR said its pending home sales plunged by 5.5 percent to 70.2 in July after surging by 4.8 percent to 74.3 in June. Economists had expected pending home sales to increase by 0.4 percent.

With the unexpected slump, the pending home sales tumbled to its lowest reading since the index began tracking in 2001.

"A sales recovery did not occur in midsummer," said NAR Chief Economist Lawrence Yun. "The positive impact of job growth and higher inventory could not overcome affordability challenges and some degree of wait-and-see related to the upcoming U.S. presidential election."

The sharp pullback by pending home sales was led by the Midwest and South, where pending home sales plummeted by 7.8 percent and 6.5 percent, respectively.

Pending home sales in the West also shrank by 3.8 percent, while pending home sales in the Northeast slid by 1.4 percent.

"In terms of home sales and prices, the New England region has performed relatively better than other regions in recent months," said Yun. "Current lower, falling mortgage rates will no doubt bring buyers into market."

A separate report released by the Commerce Department last Friday showed a substantial increase by new home sales in the U.S. in the month of July.

The Commerce Department said new home sales spiked by 10.6 percent to an annual rate of 739,000 in July after rising by 0.3 percent to an upwardly revised rate of 668,000 in June.

Economists had expected new home sales to jump by 2.1 percent to an annual rate of 630,000 from the 617,000 originally reported for the previous month.

With the much bigger than expected surge, new home sales reached their highest annual rate since hitting 741,000 in May 2023.

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