Pending Home Sales Fall 1.3% in July as Higher Rates Slow Demand
NEW YORK (TheStreet) -- Contracts to purchase previously owned homes declined in July, as buyers feeling the impact of rising interest rates retreated from the housing market.
The National Association of Realtors on Wednesday said its Pending Home Sales Index fell 1.3% to 109.5 in July from 110.9 in June, although the index was 6.7 % above July 2012.
Economists were expecting pending home sales to fall 1%.
Pending home sales are a leading indicator of existing-home sales activity, as it measures contracts signed during the month. A sale is usually closed within one or two months from the time the contract is signed.
Recent data suggests thatbuyer demand is slowing down as the rapid rise in interest rates and higher home prices have dented affordability. Buyers are also weary from the bidding wars that have been prevailing due to an acute shortage of inventory.
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