Pending home sales for July fell 2.5% and year-over-year contract signings fell 0.3%, reversing increases from the prior month, according to the National Association of Realtors’ Pending Home Sales Index.
The NAR states that all four regions of the nation saw declines, with the largest drops occurring out west.
June’s report revealed a 2.8% increase in pending home sales and year-over-year contract signings rose 1.6%. It was the second-consecutive month for increase, according to the NAR.
“Super-low mortgage rates have not yet consistently pulled buyers back into the market,” said Lawrence Yun, NAR Chief Economist. “Economic uncertainty is no doubt holding back some potential demand, but what is desperately needed is more supply of moderately priced homes.”
Yun said in the report he expects GDP growth to slow to 2% in 2019 and fall to 1.6% in 2020. He added trade tensions with China make growth projections uncertain.
The NAR states although home sales will “get a short term boost” from low mortgage rates, existing home sales are expected to be “flat” at 5.34 million in 2019, due to the volume of sales in the first seven months of the year.
According to the report, the median price of existing home sales is expected to grow, but slower at 4% in 2019, and are expected to grow to $269,000 and 3% in 2020, to $278,500.
“A boost to home building would greatly improve economic growth,” Yun said. “More free-market prices on construction materials without government interference about where homebuilders have to get their supply will also help produce more and grow the economy. The housing industry cannot grow without more supply.”
Pending home sales fell in the northeast by 1.6% in July and is 0.9% lower than it was in July 2018. The midwest saw pending home sales dropped 2.5% in July, which is 1.2% lower than last year.
The south reported a 2.4% decline in pending homes—0.1% higher than July 2018—and the west’s decline was 3.4%, which is still 0.3% above last year.