Housing is stuck because affordability is in the gutter. The NAR is yapping Nonsense.
Pending Home Sales
Pending home sales represent sign contracts of existing home sales that have not yet closed.
New home sales are reported at contract signing but existing home sales are reported at closing.
Thus, pending home sales are a leading indicator of existing home sales. The lead chart is from Mortgage News Daily. I added the dashed lines.
The National Association of Realtors (NAR) reports Pending Home Sales Decline 2.3 Percent in July.
Pending home sales in July fell to the lowest level since January 2026. Month-over-month pending home sales declined in all four major U.S. regions. Year-over-year pending home sales increased in the Midwest but declined in the Northeast, South and West.
“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. “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.”
“Job gains should bring more buyers into the market, especially if mortgage rates stabilize or decline, though that impact takes time to show up,” Yun said. “Right now, pending contracts are 30% below their pre-pandemic 2019 level, while payroll employment is 5% above. That gap points to sizable pent-up demand that should be unleashed in the coming years as more supply reaches the market and affordability improves.”
That’s another superficial, yet expected, set of comments by the NAR’s spiritual cheerleader, Lawrence Yun.
Existing-Home Sales vs Mortgage Rates
The blue dotted like shows how closely existing home sales track pending sales.
The chart also shows nonsense by Yun regarding jobs and affordability.
Houses are so unaffordable that sales did not improve between September of 2023 and January 2026 despite mortgage rates falling from 7.62 percent to 6.05 percent.
Also note that sales did not further decline on the rise in mortgage rates from 6.05 percent to the July rate or 6.54 percent.
Price Insensitive Buyers
What the chart does show is a pool of price-insensitive buyers who just don’t give a damn about affordability because for them affordability is not an issue.
These are wealthy buyers with enough stock market gains, housing equity, other means of down payments, or all cash buyers.
Also included are economic gamblers who think stock market gains, housing gains, or declining future interest rates will bail them out.
Well, good luck to the gamblers with the average 30-year mortgage rate at 6.77 percent as I type.
Meanwhile, President Trump is making absurd comments about interest rates.
And Treasury Secretary Scott Bessent has resorted to desperate measures hoping to bring down the long-term rates.
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