Pending home sales hit 2026 low

Contract signings on existing homes fell to their lowest point since January 2026 in July, sliding 2.3% from June and 2.2% year-over-year, according to the National Association of Realtors' (NAR) Pending Home Sales report released Tuesday.

The decline, which extended across all four major US regions, adds another data point to a market defined by the collision of record home prices and the highest mortgage rates of the year.

NAR Chief Economist Dr. Lawrence Yun attributed the contraction directly to rate pressure arriving at the worst possible moment for seasonal demand.

"The highest mortgage rates of the year hit right in the middle of summer, and that's pulling back contract signings," Yun said.

"Home prices are at record highs so houses for sale are sitting on the market longer, and fewer buyers are bidding above the asking price than a year ago, though there are large local market variations."

The 30-year fixed-rate mortgage hovered between 6.5% and 6.7% through July, its highest sustained range in 2026, according to Freddie Mac's Primary Mortgage Market Survey. That rate environment reinforces a broader pattern of softening demand already evident in recent data.

Existing-home sales also declined for a second straight month in July, signaling that affordability constraints are becoming structural rather than seasonal.

US home prices rose 1.0% year over year in July, marking a third consecutive month near that pace, according to First American Data & Analytics' Home Price Index (HPI).https://t.co/0Z0ZJvrW6q

— Mortgage Professional America Magazine (@MPAMagazineUS) August 17, 2026

Pent-up demand: a long-term counterweight

Yun pointed to a structural gap that could underpin a multi-year recovery once conditions shift.

"Right now, pending contracts are 30% below their pre-pandemic 2019 level, while payroll employment is 5% above," he said.

"That gap points to sizable pent-up demand that should be unleashed in the coming years as more supply reaches the market and affordability improves."

The labor market complicates the timeline. The US shed 23,000 jobs in July, and 234,000 workers exited the labor force entirely, according to the US Labor Department. The unemployment rate held at 4.1%.

At the metro level, several markets defied the national slide. Virginia Beach-Chesapeake-Norfolk led the nation's 50 largest metros with a 17.2% annual gain in pending sales, followed by San Antonio-New Braunfels at 11.8% and Cincinnati at 6.2%.

Midwest holds; West takes the steepest fall

The Midwest posted the mildest monthly contraction at 0.7% and was the sole region to record annual growth, rising 1.7% year-over-year.

The West suffered the most pronounced decline, down 4.7% from June and 7.1% from July 2025. That double-digit annual slide reflects a market where elevated prices, high financing costs, and thin inventory have pushed US home sales to a two-year low and sidelined buyers across the region.

The Northeast fell 2.0% month-over-month and 0.2% year-over-year; the South dropped 2.2% monthly and 3.0% annually.

Median list prices declined 2.4% year-over-year in July, and price per square foot fell in 34 of the top 50 metro areas, per Realtor.com Economics data.

Closed sale prices, however, remain at record highs nationally, a lag that reflects how slowly transaction outcomes respond to softening list behavior.

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