Housing contract activity slumped again in June as buyers remain priced out
Home contract signings slumped more than expected in June, the latest sign that the housing market is still essentially frozen.
The Pending Home Sales Index slumped 0.8% from May and 2.8% from a year earlier to a reading of 72. A level of 100 is equal to contract activity in 2001. Economists had expected a small month-over-month gain and a smaller annual decline.
Contract signings fell in all regions of the country on a monthly and annual basis, except the Northeast, where they were flat from 2024 and up 2.1% from May.
Mortgage rates near 7%, coupled with high prices, have dampened the traditional spring homebuying season. Homes typically go under contract a month or two before they’re sold, meaning June’s contract activity reflects the end of the typical busiest time of the year for sales.
Read more: Will mortgage rates go up to 7%? Signs to watch for.
This spring and summer, for-sale inventory has surged, but it hasn’t been enough to convince buyers to come off the sidelines with home prices at record highs.
Not all homes that go under contract end up converting to sales. Contract cancellations have been on the rise in recent months as buyers and sellers remain far apart on price and repair expectations.
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Pending home sales are typically an early indicator of housing market activity. Completed home sales also dropped more than expected in June to a seasonally adjusted annual rate of 3.93 million.
Lisa Sturtevant, the chief economist of Bright MLS, said in a statement that the latest numbers are a sign that home sales in 2025 will be even worse than last year’s 30-year low.
“Unfortunately, there is little to suggest any sort of major rebound in home sales as we head into fall,” she said.
Claire Boston is a Senior Reporter for Yahoo Finance covering housing, mortgages, and home insurance.
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