Contracts to buy existing homes in the U.S. fell to a record low in July as rising prices and higher borrowing costs drove potential buyers out of the market.
The National Association of Realtors on Thursday Pending Home Sales IndexThe index, based on signed contracts, fell 5.5 percent last month to 70.2, the lowest since the survey began in 2001.
Pending home sales fell in all four regions last month.
Economists polled by Reuters had expected a 0.4 percent rise in contracts due for sale in the next one or two months.
Pending home sales in July plummeted 8.5% from the same month last year.
“The positive effects of job growth and rising inventory were not enough to overcome the challenges of high home prices and a wait-and-see attitude due to the upcoming U.S. presidential election,” said Lawrence Yun, chief economist at the National Association of Realtors.
Sales activity is expected to remain sluggish.
The share of consumers planning to buy a home in the next six months fell in August to the lowest level since early 2013, according to a Conference Board survey conducted Tuesday.
Although the pace of increases in home prices has slowed, they remain high.
Home prices rose 5.1% year-over-year in June, the Federal Housing Finance Agency said Tuesday, the smallest increase in nearly a year, following a 5.9% increase in May.
