Today, the National Association of Realtors (NAR) released its Pending Home Sales Report for July. It showed that pending home sales declined, with the seasonally adjusted national index falling 1.3% from June but increasing 6.7% above the level seen in July 2012. Meanwhile, NAR's Chief Economist Lawrence Yun is suggests that the recent pullback in contract activity does not constitute a general trend, while in the Northeast and West, higher rates and prices are having an impact on sales:
The modest decline in sales is not yet concerning, and contract activity remains elevated, with the South and Midwest showing no measurable slowdown. However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the Northeast and the West ... More homes clearly need to be built in the West to relieve price pressure, or the region could soon face pronounced affordability problems.
The following chart shows the seasonally adjusted national pending home sales index, along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005.