US existing home sales contract volume has fallen for two consecutive months in July, with high interest rates and high house prices continuing to suppress demand.

The number of signed contracts for existing homes in the United States fell for the second consecutive month in July, reflecting that potential buyers remain cautious in the face of high housing prices and borrowing costs. The housing market continues to show signs of prolonged weakness with no clear improvement. According to data released on Thursday by the National Association of Realtors (NAR), the July pending home sales index dropped by 0.4% to 71.7, close to the average level so far this year. Economists surveyed by Bloomberg had previously forecast a 0.2% decline in July, which fell short of market expectations. Although the 30-year fixed mortgage rate has dropped to a four-month low of 6.67% in early August and has remained relatively low recently, financing costs are still twice as high as they were at the end of 2021, when many homeowners locked in low rates through refinancing. Lawrence Yun, chief economist of the NAR, pointed out, "Even though mortgage rates, housing affordability, and inventory have shown some improvement, buyers remain hesitant." Yun warned that unless mortgage rates continue to decline consistently and housing prices become more attractive, it will be difficult for existing home sales to exceed an annualized level of 4 million units, a sales pace that has been maintained for two years. It is worth noting that the national house price growth has significantly slowed down. In July, house prices only rose by 0.2% year-on-year, with some previously hot markets in the West and South even experiencing declines, and inventory overhang being a significant factor in suppressing prices. Yun added, "There has been an increase in mortgage applications recently, indicating that more potential active buyers are entering the market, but many have not yet entered the signing stage." Regionally, the Southern region, which is the largest market for existing home sales in the United States, saw a slight decline in signed contracts, while the Midwest and Northeast regions also saw declines, and the Western market grew against the trend by 3.7%. The number of signed contracts for existing homes is typically a leading indicator of future actual transactions, as homes usually take one to two months to complete the transaction after the contract is signed.