Pending Homes Sales Decline Modestly in July—Down Eight of the Last Nine Months

The National Association of Realtors® (NAR) reported on Wednesday (8-24-22) their Pending Homes Sales Index (PHSI), which is based on signed real estate contracts, not actual closings, for existing single-family homes, condominiums, and co-ops, declined 1.0% in July from June to a reading of 89.8. The PHSI has now declined in eight times in the past nine months. Year-over-year contract signings have declined 19.9%.

An index of 100 is equal to the level of contract activity in 2001.

NAR notes that three out of the four major regions posted month-over-month declines in July. Year-over-year declines were posted in all four major regions. The Northeast PHSI declined 1.9% from June, while the Midwest PHSI retreated 2.7%. The South PHSI in July fell 1.1%, while the West PHSI registered a 2.2% gain.

According to NAR, its Housing Affordability Index (HAI) for June plummeted to its lowest level since 1989. Accounting for a 30-year fixed-rate mortgage and a 20% down payment, the monthly mortgage payment on a typical home jumped to $1,944—an increase of 54%, or $679, from one year ago. NAR says the HAI data lags behind the markets by two-months.