US pending home sales fall by less than expected in July, NAR spies bottom

Pending home sales in the US fell by less than expected last month and contract signings may be close to a bottom, a leading business lobby group said.

"In terms of the current housing cycle, we may be at or close to the bottom in contract signings," National Association of Realtors' chief economist, Lawrence Yun, said.

"This month's very modest decline reflects the recent retreat in mortgage rates. Inventories are growing for homes in the upper price ranges, but limited supply at lower price points is hindering transaction activity."

Nevertheless, July's decline marked the eighth drop out of the past nine months, alongside a 54% jump in mortgage payments over the past year to reach $1,944 per month.

NAR's Pending Home Sales Index retreated at a month-on-month clip of 1.0% in July (consensus: -2.5%).

Of the country's four main geographical regions, the index only rose in the West on the month, while versus a year ago they were lower across the US and by 30% in the West, NAR said in a statement.

"Home prices are still rising by double-digit percentages year-over-year, but annual price appreciation should moderate to the typical rate of 5% by the end of this year and into 2023," Yun added.

"With mortgage rates expected to stabilize near 6% alongside steady job creation, home sales should start to rise by early next year."