• Declines are sharpest in Northeast & Midwest regions.

• Limited availability of  homes for sale constrains buying.

Pending home sales fell 1.8% during July (-8.5% y/y) following a 2.0% June decline, revised from -1.9%. The Realtors Association reports that purchases continue to be restrained by a limited supply of homes for sale.

The July sales decline was largest in the Northeast where sales fell 6.6% (-16.9% y/y) after improving 0.5% in June. Sales in the Midwest weakened 3.3% (-8.5% y/y) after a 0.5% June increase. In the South, sales eased 0.9% last month (-6.7% y/y) following a 3.2% drop in June. To the upside, sales in the West improved 1.9% (-5.7% y/y) after falling 4.0% in June.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, analogous to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is likely a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's PREALTOR database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the SURVEYW database.