The numbers: An index of pending home sales fell 2.5% in July, the National Association of Realtors said Thursday. The drop follows two straight monthly gains. Economists had forecast a 0.3% decline in July.
What happened: All the four regions of the country saw a decline in contract signings for existing homes, with the largest decline in the West.
In the Northeast, sales fell 1.6%, while sales in the South fell 2.4%. Sales were down 2.5% In the Midwest and 3.4% in the West.
Compared to 12 months ago, contract signings fell 0.3% in July.
Big picture: The eight-month drop in mortgage rates is sparking much more refinancing activity than home buying. The trend in home buying has been rising, but only slightly.
What are they saying? “Super low mortgage rates have not yet consistently pulled buyers back into the market,” said Lawrence Yun, the NAR’s chief economist. “Economic uncertainty is no doubt holding back some potential demand, but what is desperately needed is more supply of moderately priced homes.”
Market reaction: Stocks were higher on reports China and the U.S. might be seeking ways to pull back from an all-out trade war. The S&P 500 SPX, +1.27% index was up 36 points to 2,923 in morning trading. The index was on track for its best week since June.