U.S. Pending Home Sales Decline in July

WASHINGTON (Reuters) – Contracts to buy previously owned U.S. homes fell more than expected in July as higher mortgage rates and a slowing labor market sidelined prospective homeowners.

The National Association of Realtors reported on Thursday that pending home sales, based on signed contracts, slipped 0.4% last month. Economists polled by Reuters had forecasted a 0.1% dip. However, pending home sales rose 0.7% from a year earlier.

High mortgage rates have negatively impacted the housing market. Although mortgage rates have eased from this year’s peaks due to expectations that the Federal Reserve might resume cutting interest rates in September, they remain high. The slowing labor market is also becoming a constraint for home sales.

“Even with modest improvements in mortgage rates, housing affordability, and inventory, buyers still remain hesitant,” said Lawrence Yun, the NAR’s chief economist.