Affordability and the U.S. election are delaying home-buying decisions for American consumers

U.S. home sales failed to rebound as expected this summer, according to the National Association of Realtors (NAR). In July 2024, pending home sales decreased by 5.5%, with all four regions of the country experiencing monthly transaction declines. While the Northeast saw year-over-year growth, the Midwest, South, and West reported declines.

The Pending Home Sales Index (PHSI), which predicts home sales based on signed contracts, dropped to 70.2 in July, the lowest point since the index was established in 2001. Compared to the previous year, pending transactions were down by 8.5%. An index value of 100 indicates the contract activity level in 2001.

"There was no summer sales recovery," said NAR Chief Economist Lawrence Yun. "Even with job growth and increased inventory, affordability issues and uncertainty surrounding the upcoming U.S. presidential election dampened the market."

Regional data showed mixed results:

• The Northeast’s PHSI fell by 1.4% to 64.6 from June but was up 2.4% compared to July 2023.

• In the Midwest, the index dropped 7.8% to 67.8, reflecting an 11.4% decline from the previous year.

• The South experienced a 6.5% decrease to 83.5 in July, down 11.5% year-over-year.

• The West saw a 3.8% dip to 56.2, a 6.0% decline compared to July 2023.

Yun noted that the New England region has performed better in recent months regarding home sales and prices. "Falling mortgage rates will likely draw more buyers into the market," he added.