Pending-home sales rose 0.9% from June to July, the second monthly increase in a row and an indication that sales could improve after falling for much of the year, the National Association of REALTORS® said, citing its Pending Home Sales Index.      

Pending sales, in which the contract has been signed but the transaction has not closed, are considered a leading indicator and generally precede existing-home sales by a month or two. Year over year, sales were down 14%.  

“The small gain in contract signings shows the potential for further increases in light of the fact that many people have lost out on multiple home buying offers,” NAR Chief Economist Lawrence Yun said in a press release. “Jobs are being added and, thereby, enlarging the pool of prospective home buyers. However, rising mortgage rates and limited inventory have temporarily hindered the possibility of buying for many.” 

Regionally, pending sales were up monthly in the South and West and down in the Northeast and Midwest. All regions experienced annual declines. 

First American Chief Economist Mark Fleming called July’s rise in sales a pleasant surprise but cautioned that transactions likely took a hit this month due to recent interest rate increases. 

“Likely not out of the woods yet,” Fleming said. “According to our analysis, we were in housing recession between May and November last year, briefly came out of recession between December and April of this year but have since dipped back in to housing recession this summer as rates have increased and sales volume dipped lower again.”