US pending home sales fall 2.3% in July, below expectations

Pending home sales in the US fell sharply in July, missing market expectations for a slight increase as elevated mortgage rates and record home prices continued to weigh on affordability, data showed Tuesday.

The National Association of Realtors (NAR) said its Pending Home Sales Index declined 2.3% from the previous month, falling to its lowest level since January 2026.

Markets had expected a monthly increase of 0.1%.

Pending sales, which track signed contracts for existing homes and typically lead completed sales by one or two months, were also down 2.2% from July 2025.

Contract signings declined month-on-month across all four major US regions.

The West posted the steepest monthly drop at 4.7%, followed by the South at 2.2%, the Northeast at 2% and the Midwest at 0.7%.

On an annual basis, pending sales fell 7.1% in the West, 3% in the South and 0.2% in the Northeast. The Midwest was the only region to record an increase, rising 1.7%.

“The highest mortgage rates of the year hit right in the middle of summer, and that’s pulling back contract signings,” said NAR Chief Economist Lawrence Yun.

Yun said record-high home prices were also causing properties to remain on the market longer, while fewer buyers were offering above the asking price compared with a year earlier.

Pending contracts are currently 30% below their pre-pandemic level in 2019, despite US payroll employment being 5% higher, according to the association.

Yun said the gap pointed to substantial pent-up housing demand that could emerge in the coming years if mortgage rates decline, affordability improves and more homes become available.