Contracts to purchase previously owned homes in the United States fell far more than expected in June, highlighting continued weakness in the housing market. The National Association of Realtors’ Pending Home Sales Index dropped 5.4% to 72.5, well below economists’ forecast of a 0.5% decline. Pending sales were also down 0.3% compared with a year earlier, with all four U.S. regions reporting declines.
The slowdown reflects the combined impact of elevated mortgage rates and record-high home prices, which continue to discourage prospective buyers, particularly first-time homeowners. Since pending sales typically convert into completed transactions within one to two months, the latest figures point to subdued existing home sales in the coming months.
According to NAR Chief Economist Lawrence Yun, the highest mortgage rates in nearly a year, coupled with record national median home prices, are keeping the housing market sluggish. Mortgage rates are also expected to remain elevated amid renewed geopolitical tensions following the collapse of a fragile ceasefire between the United States and Iran.
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