Contract Signings Fall But Less Than Month Before
Measuring the number of contracts to buy homes signed in a given month will give you a good idea of what the following month's home sales numbers will look like. After all, signing a contract to buy is the first step in a closing process that usually lasts a few weeks. Which means a signed contract today will be a closed home sale in about a month. It also means The National Association of Realtors' Pending Home Sales Index can give us an early insight into what's happening in the housing market now.
The NAR's most recent release says contract signings fell 1 percent in July. But while the decline indicates the market is still slowing, the rate of decline improved greatly from the previous month, according to the new numbers. In fact, the previous month's index saw an 8.6 percent drop. Lawrence Yun, NAR's chief economist, says the market should soon begin to stabilize. “Home prices are still rising by double-digit percentages year-over-year, but annual price appreciation should moderate to the typical rate of 5 percent by the end of this year and into 2023,” Yun said. “With mortgage rates expected to stabilize … alongside steady job creation, home sales should start to rise by early next year.”
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