The dream of buying a home keeps getting harder to reach.
In July, the number of signed contracts for previously owned homes fell to its weakest level since the start of the year. The National Association of Realtors reported pending sales dropped 2.3% to an index reading of 71.2. That number, which measures signed contracts on existing homes, is at its weakest level since January and ties for the second-lowest level in records going back to 2001.
The culprit is the same one that has plagued the housing market: mortgage rates are high, and prices are higher.
Lawrence Yun, the chief economist for the National Association of Realtors, put it plainly. "The highest mortgage rates of the year hit right in the middle of summer, and that's pulling back contract signings," Yun said.
Borrowing costs on a typical 30-year loan remain close to the peak reached near the end of July, a level that has encouraged owners to stay put and kept purchase prices out of reach for many households.
Meanwhile, home prices remain at record highs. "Home prices are at record highs so houses for sale are sitting on the market longer, and fewer buyers are bidding above the asking price than a year ago, though there are large local market variations," Yun said.
The national numbers hide a lot of variation depending on where you look. After stripping out seasonal adjustments, July signings trailed the year-ago level by 2.5%, and no region was spared.
In the West, signed contracts decreased 4.7%. The South - the country's largest regional housing market - fell 2.2%, its weakest reading since the opening month of 2025.
Builders are seeing the slowdown too: single-family home starts in July ran at the slowest pace since 2022.
For anyone hoping to buy, this news is not all bad. The market is shifting. Bidding wars have cooled, and with homes lingering on the market, buyers have more room to weigh their options.
The rub is affordability. Even with demand softening, prices are not falling in any meaningful way.
Because signed contracts usually turn into completed sales a month or two later, this index has long been treated as a leading indicator for existing-home sales.
The bottom line: The housing market is cooling, but it is not correcting. For buyers, that means patience is still the main strategy, and for sellers, it means the days of multiple offers over asking are fading, at least for now.