Pending home sales drop more than expected in June as mortgage rates rise

Jul. 27, 2022 10:00 AM ETFMCCBy: Liz Kiesche, SA News Editor21 Comments

Contract Pending sign

MarkCoffeyPhoto/E+ via Getty Images

June Pending Home Sales: -8.6% M/M to 91.0 vs. -1.0% consensus and +0.4% prior (revised from +0.7%).

Pending sales declined in all four major regions, with the West showing the biggest monthly drop.

On a Y/Y basis, contract signings dropped 20%.

"Contract signings to buy a home will keep tumbling down as long as mortgage rates keep climbing, as has happened this year to date," said National Association of Realtors Chief Economist Lawrence Yun. NAR's latest projection expects home sales to fall 13% this year.

"With mortgage rates expected to stabilize near 6% and steady job creation, home sales should start to rise by early 2023," Yun said.

The Northeast Pending Home Sales Index ("PHSI") fell 6.7% M/M to 80.9, the Midwest PHSI dropped 3.8% to 93.7, the South PHSI slid by 8.9% to 108.3, and the West PHSI sank 15.90% to 68.7.

The average 30-year fixed-rate mortgage stood at 5.70% at the end of June, down from 5.81% in the prior week but up from 2.98% at the same time a year ago, according to Freddie Mac (OTCQB:FMCC).

Earlier on Wednesday, Durable goods orders unexpectedly rose in June, led by transportation equipment

Recommended For You

Comments (21)

To ensure this doesn’t happen in the future, please enable Javascript and cookies in your browser.
Is this happening to you frequently? Please report it on our feedback forum.
If you have an ad-blocker enabled you may be blocked from proceeding. Please disable your ad-blocker and refresh.