August 19, 2026
Pending home sales track homes that are officially under contract but have not closed yet. Because it usually takes one to two months between signing a contract and closing on a home, this index is considered a leading indicator, meaning it tends to predict where closed sales are headed in the near future. The National Association of REALTORS® has been tracking this data since 2001, so it gives us a long, consistent lens into buyer behavior.
According to NAR's latest release, pending home sales dropped 2.3% month over month in July, and were down 2.2% compared to the same time last year. That puts contract activity at its lowest level since January 2026. Every single region of the country saw sales decline from June to July, which tells us this was not a one off local blip, it was a broad slowdown.
NAR's Chief Economist, Dr. Lawrence Yun, pointed to a combination of factors. Mortgage rates hit their highest point of the year right in the middle of the summer buying season, which historically is when activity should be picking up, not slowing down. At the same time, home prices remain at record highs, so homes are sitting on the market longer and fewer buyers are willing to bid above asking price compared to a year ago.
The numbers varied quite a bit depending on where you look. The West saw the steepest monthly and annual declines, down 4.7% from June and 7.1% from a year ago. The South also softened, falling 2.2% month over month and 3.0% year over year. The Northeast dipped 2.0% for the month but was nearly flat annually, down just 0.2%. The Midwest was the only region to post a year over year gain, up 1.7%, even though it slipped slightly month over month.
Not every local market is struggling. Data from Realtor.com Economics, cited in NAR's report, shows a handful of metro areas posting solid annual gains in pending sales, led by Virginia Beach-Chesapeake-Norfolk at 17.2% and San Antonio-New Braunfels at 11.8%. Closer to home, Buffalo-Cheektowaga posted a 1.3% annual increase, a reminder that even in a slower national market, pockets of strength exist depending on local job growth, affordability, and inventory levels.
Actually, yes, and it is worth paying attention to. Dr. Yun noted that current pending contract activity sits about 30% below pre-pandemic 2019 levels, while payroll employment nationally is running about 5% above those same 2019 levels. In other words, people are working, but they are not buying homes at anywhere near the rate you would expect given how strong employment is. That gap represents a meaningful amount of pent up demand. If mortgage rates stabilize or ease and more inventory reaches the market, there is real reason to believe activity could pick back up in the coming years.
Disclaimer: This content is intended for informational and educational purposes only and is not intended to be construed as legal, tax, financial, or insurance advice. Every property and tax situation is unique. Please consult a licensed attorney, CPA, or tax professional regarding your specific circumstances before making any decisions related to property improvements, tax assessments, or real estate transactions. Mohammed M. Rahman is a licensed real estate broker in New York. Contact: Mo@ClosedByMo.com.
