Inventories Continue to Constrain Home Purchase Activity

While existing home sales have increased in the last two months after a four-month slump, those sales don’t look especially bright as we head into the fall and winter doldrums. The National Association of Realtors® (NAR) says pending home sales dipped modestly in July, following a 1.9 percent dip in June. Its Pending Home Sales Index (PHSI), a leading indicator of existing home sales, fell 1.8 percent from its June level to a reading of 110.7. It was the fifth time this measure, based on contracts to purchase single-family homes, townhouses, condos, and cooperative apartment, has retreated in the last seven months. The index is now down 8.5 percent from the July 2020 level of 121.0.