Pending home sales fell 2.3% in July, dragging the National Association of Realtors’ index down to 71.2, its lowest reading since January, according to NAR’s own report, published August 18, 2026. Pending sales track homes that are under contract but haven’t closed yet, which makes the index a leading indicator — a signal of what closed sales will look like a month or two out, not a snapshot of what already happened.
“The highest mortgage rates of the year hit right in the middle of summer, and that’s pulling back contract signings,” said NAR Chief Economist Dr. Lawrence Yun in the association’s own release. The timing lines up: mortgage rates climbed through much of the summer before easing slightly at the very end of August, meaning the buyers signing contracts in July were shopping during one of the more expensive stretches of the year to borrow.
Key Points
- Pending home sales index fell to 71.2, down 2.3% from June and down 2.2% year-over-year.
- July’s reading is the lowest level since January 2026.
- Every region posted a monthly decline, though the size of the drop varied sharply.
- The West logged the steepest fall, down 4.7% month-over-month and 7.1% year-over-year.
How the Regions Compare
- Northeast: index 64.5, down 2.0% monthly, down 0.2% annually.
- Midwest: index 73.3, down 0.7% monthly, but still up 1.7% annually — the only region posting a year-over-year gain.
- South: index 85.0, down 2.2% monthly, down 3.0% annually.
- West: index 52.7, down 4.7% monthly, down 7.1% annually — by far the weakest reading of any region.
What It Means for Buyers and Sellers
For sellers, a falling pending-sales index is an early warning that closed sales in the months ahead are likely to soften too, since today’s signed contracts become next month’s completed deals. Homes that might have drawn multiple offers earlier in the year may sit longer this fall, particularly in the West, where contract activity is falling fastest.
For buyers, a cooling contract pace can translate into more negotiating room, especially in markets where sellers are watching showings slow down. The Midwest’s lone year-over-year gain suggests regional pricing and affordability still matter more than any single national headline, and buyers weighing where to shop this fall may find more competition in some regions than others.
NAR’s index is watched closely because it tends to lead existing-home sales data by four to six weeks, meaning the industry will be looking at September’s closed-sales figures for confirmation of whether July’s pullback was a blip tied to peak summer rates or the start of a longer slowdown heading into the traditionally quieter fall and winter selling season. Real estate agents in slower-moving regions like the West are already reporting longer average days-on-market, which tends to be the first visible sign buyers feel before the national index catches up.