Despite the sales drop, the report shows some signs of optimism as fall approaches
Elevated interest rates and affordability challenges continued to weigh down the housing market in June, as pending home sales fell 0.8% from May and 2.8% from June 2024, according to the latest numbers from the National Association of Realtors (NAR).
The latest report from NAR, released Wednesday, tracks the number of homes under contract, offering a glimpse into future sales activity.
While the overall trend was downward, the Northeast stood out as the only region to post a month-over-month increase, rising by 2.1%. However, contract activity in the Northeast was unchanged from last June.
Lawrence Yun, NAR chief economist, noted the sales bump in the Northeast despite the high home prices in the region.
“The data shows a continuation of small declines in contract signings despite inventory in the market increasing,” Yun said. “Pending sales in the Northeast increased incrementally even though home price growth in the region has been the strongest in the country.”
Decreases in other regions
In contrast, the Midwest, South, and West all experienced both monthly and annual decreases in pending sales. The West was hit hardest, with a 3.9% monthly and 7.3% yearly decline.
In the Midwest, pending home sales fell 0.8% from May to June, and 0.9% year-over-year. In the south, the monthly decline was 0.7%. The annual drop was more sizeable, falling 2.9% from June 2024.
Mortgage broker Matt Gouge says high prices and rates are causing buyer hesitation, especially in California, but underlying demand remains strong.https://t.co/8rvCRZ2LYt
— Mortgage Professional America Magazine (@MPAMagazineUS) July 30, 2025
Existing home sales also saw a decline in June, falling 2.7%, according to a report from the National Association of Realtors last week.
The decline in pending home sales aligns with data from Redfin released last week, showing just a 2.2% increase in median asking price year over year, the smallest increase in nearly two years.
The median asking price is $403,000, with the annual increase the smallest since August 2023. The median sale price increased 1.6% to another all-time high of $399,000. However, the annual growth was small compared to the 5% to 6% growth throughout most of 2024 and 2025, according to Redfin.
Signs of optimism
Both reports included some signs of optimism. The Redfin report from last week showed the median mortgage payment was $2,679, its lowest level in nearly five months.
Despite the dip in contract signings, there are signs of resilience in the market. The Realtors Confidence Index, which measures sentiment among real estate professionals, reported a 4% uptick in homebuyer traffic and a 6% rise in seller activity over the past year. This suggests that interest in both buying and selling homes is growing, even as pending sales numbers soften.
Yun noted there could be signs that the housing market is starting to gain momentum, despite the ongoing rate and affordability challenges.
“The Realtors Confidence Index shows early indications of potential contract signings increasing moving forward,” Yun said. “Realtors are optimistic that homebuying and selling activity will increase. That confidence is supported by the fact that mortgage applications have been rising.”
The Pending Home Sales Index (PHSI), which serves as a forward-looking gauge based on contract signings, remains a key indicator for the housing sector. With an index value of 100 representing the contract activity level of 2001, the latest figures suggest the market is still facing headwinds.
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