Home sales appear to be slipping in some areas, with pending home sales down slightly in July compared to the previous month, this reported by the National Association of Reareal estate investingltors (1). The Pending Home Sales number tallies the number of signed contracts to buy homes and is not the same as a sold home.

 A further look into the numbers shows that while there was a decline, it was relatively small with a 1.3 percent fall. At the same time however, pending sales are still up 6.7 percent when compared to the same period last year. The pending home sales decline is a national composite and the National Association of Realtors also reports on regional numbers. The Northeast pending home sale count fell the most by 6.5 percent from June to July and the best showing comes from the South, showing a 2.6 percent rise.

So what are we to make of these numbers? It could be said that interest rates are having an effect on home buying. That’s certainly possible, as interest rates as reported by Freddie Mac (2) hit 4.58 percent, up from 3.40 percent last January. That’s more than a full percentage point jump and can certainly knock a few people out of the qualifying bracket but still historically low.

Home prices have also been on a steady rise with areas in the West seeing the strongest gains, including areas such as Los Angeles, San Francisco, Phoenix and Las Vegas. The combination of higher home prices as well as slightly higher rates should have an impact on home sales albeit a marginal one.

If month to month pending contracts were moving downward on a consistent basis, that would be cause for concern but this index has showed that pending home sales have stayed above it’s one year ago levels for more than two years straight. At the same time, the Realtors predict that home sales will still increase by 10 percent compared to last year, totaling 5.1 million homes.

  1. National Association of Realtors www.tinyurl.com/nhgapkp
  2. Freddie Mac’s Weekly Mortgage Survey www.freddiemac.com/pmms