Pending Home Sales Drop 5.4% in June Amid Record Prices

Pending home sales declined by 5.4% in June compared to May, marking a significant pullback attributed to climbing mortgage rates and a new record high in home prices. The National Association of Realtors (NAR) reported that contract signings also decreased by 0.3% year-over-year. This monthly decline was observed across all U.S. regions, while the annual comparison showed dips in the South and West, but gains in the Northeast and Midwest.

NAR Chief Economist Lawrence Yun cited challenging economic conditions, including an average mortgage rate of 6.49% in June, the highest since August 2025, as reported by Freddie Mac. Concurrently, the median sales price of homes reached an all-time high of $440,600, an increase of 1.8%. Yun noted that the combination of high mortgage rates and record home prices creates a difficult market, particularly for first-time buyers, though job growth is expected to support housing demand.

Regionally, the Midwest experienced the largest month-over-month decrease in pending sales, with an 8.9% drop. The West followed with a 4.7% decrease, the South with 4.1%, and the Northeast with 3%. On an annual basis, the Northeast saw a 2.2% increase in contract signings, and the Midwest a 0.3% increase. Conversely, the West and South saw year-over-year declines of 1.1% and 0.9%, respectively.

Among the 50 largest metropolitan markets, Virginia Beach, VA, recorded the largest annual increase in contract signings at 15.4%, followed by Sacramento, CA (+15.2%) and Kansas City, MO (+14.4%). Yun emphasized that closing activity, rather than pending contracts, directly impacts the economy, as pending sales are indicators of future closed deals and are subject to contract fallout and contingencies.