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First Cut: NAR Pending Home Sales Index down in July, but on track for solid gains in sales

The NAR’s Pending Home Sales Index fell 2.5% in July to 105.6 after an unrevised 108.3 in June. The index was down a scant 0.3% from the 105.9 in July 2018.

While the decline in the index was more than expected, it only represents a return to the recent trends rater than a fundamental slowing in pending home sales. The nearly 3 point gain in June was an outlier as consumers rushed to get contracts in place while mortgage rates were on the decline.

The decrease was spread fairly evenly across regions, supporting that the housing market is subject to the odd one-month blip even as underlying moderate conditions are still in place. Pending sales were down 1.6% in the Northeast, 2.5% in the Midwest, 2.4% in the South, and 3.4% in the West.

On average, mortgage rates continued to decline into August and may prompt another upswing in contracts next month.

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