Pending Home Sales Drop 5.5% to All-Time Low in July

The numbers: Pending home sales hit a fresh record low in July as declining mortgage rates failed to spark increased activity, in part because of the uncertainty over the election.

Pending home sales fell 5.5% in July from the previous month, according to the monthly index released Thursday by the National Association of Realtors (NAR). That pushed the index down to an all-time low. The index had hit an all-time low in May but bounced back in June.

The drop in the index in July was unexpected. Economists were forecasting pending home sales to rise 0.1%, according to a survey by the Wall Street Journal.

Contract signings fell to a record low, the NAR said, since it began tracking sales data since 2001.

Year-over-year, transactions were down 8.5%.

Key details: Pending home sales sank in all four regions of the country. The New England region has performed better than other regions in the past few months.

Big picture: U.S. mortgage rates are now at their lowest level in 16 months, fueling some optimism in the battered housing sector.

What the NAR said: “A sales recovery did not occur in midsummer,” said NAR Chief Economist Lawrence Yun. “The positive impact of job growth and higher inventory could not overcome affordability challenges and some degree of wait-and-see related to the upcoming U.S. presidential election.” He added that falling mortgage rates should bring buyers into the market in coming months.

Looking ahead: “Lower mortgage rates are incrementally supporting demand, but rates are still too high to support new listings of homes for sale, thus applying a damper on market turnover,” said Shelly Kaushik, economist at BMO Capital Markets, in a note.

Market reaction: Stocks opened higher on Thursday while the 10-year Treasury yield rose in early morning trading.

MarketWatch, the place where you can find the latest stock market, financial and business news. Cryptocurrency is trending now, get the latest info on Bitcoin, Ethereum, and XRP.