US Pending Home Sales Fall 0.4% in July Amid Cautious Buyer Demand

Pending home sales in the U.S. declined by 0.4% month over month in July despite slight improvements in mortgage rates, housing supply, and affordability, indicating continued buyer hesitation amid economic uncertainty. Year over year, sales showed a modest increase of 0.7%, with regional variations: the West experienced monthly gains while the Midwest and South saw annual increases, whereas the Northeast and West noted annual declines. The National Association of Realtors (NAR) highlighted that buyers are cautious due to the significant financial commitment home purchases represent, coupled with concerns about jobs, inflation, and the broader economy. The Realtors' Confidence Index reflects weakened market sentiment, with fewer realtors expecting increased buyer and seller traffic in the near term. Analysts anticipate that a possible Federal Reserve interest rate cut could expand the pool of eligible buyers and potentially improve market activity. However, current market dynamics suggest a 'stuck' scenario where sellers face unmet price expectations and buyers are constrained by persistent affordability challenges.