New contracts for existing homes fell nationally in July, a sign the housing recovery may be taking a breather.
The National Assn. of Realtors said that its pending sales index fell 1.3% from June, the second consecutive monthly decline. The report, released Wednesday, comes as buyers face higher mortgage interest rates, which the group said lessened demand.
The decline was slightly greater than expected although pending sales are 6.7% higher than July 2012.
“The modest decline in sales is not yet concerning, and contract activity remains elevated, with the South and Midwest showing no measurable slowdown,” Lawrence Yun, chief economist for the trade group, said in a statement. “However, higher mortgage interest rates and rising home prices are impacting monthly contract activity in the high-cost regions of the Northeast and the West.”
The pending sales index, which covers contracts signed for existing homes but not yet closed, stood at 109.5 in July. A level of 100 is considered normal.