Pending home sales fell slightly last month amid rising interest rates that made housing more expensive, according to a new report.
The National Assn. of Realtors said Monday that its pending sales index fell 0.4% to 110.9 in June from a multi-year high reached a month earlier. Though it was a decline, the drop-off was less than economists expected.
The index, which covers contracts signed for existing homes but not yet closed, remains 10.9% higher than June of last year. A level of 100 is considered normal.
Rising prices and interest rates have begun to eat away at affordability, leading to fewer contract signings last month, Lawrence Yun, the group’s chief economist said.
“Mortgage interest rates began to rise in May, taking some of the momentum out of contract activity in June,” he said in a statement. “The persistent lack of inventory also is contributing to lower contract signings.”
The Realtor group said pending sales remained flat in the Northeast and fell in the Midwest and South. Buyers signed more contracts in the West as the index rose 3.3% in June in that region.