Contract closings decreased 2.2% from a month earlier to a 4.07 million annualized pace, National Association of Realtors data showed Tuesday. The rate, which is close to the slowest since 2010, was weaker than nearly all estimates in a Bloomberg survey of economists.A more-than doubling of mortgage rates over the past few years has discouraged homeowners from listing their properties and kept asking prices elevated.
The combination of inventory constraints in the resale market and higher borrowing costs is steering some prospective buyers toward new construction, while others have pulled out altogether. “Two factors are driving current sales activity – inventory availability and mortgage rates. Unfortunately, both have been unfavorable to buyers,” Lawrence Yun, NAR’s chief economist, said in a statement.While the number of homes for sale rose from a month earlier to 1.11 million, it marked the smallest total inventory for any July in data back to 1999. At the current sales pace, it would take 3.3 months to sell all the properties on the market.
Existing-home sales account for the majority of US housing and are calculated when a contract closes. Data on new-home sales, which make up the remainder and based on contract signings, are due Wednesday.