U.S. Pending Home Sales Fell in July

The number of U.S. existing homes going under contract fell in July, the fourth decline in the past five months.

The National Association of Realtors Thursday said its pending home sales index declined 0.8% from the prior month to 109.1 in July. Economists surveyed by The Wall Street Journal had expected a 0.4% increase from June.

The index was down 1.3% in July from a year earlier, its third annual decline in four months.

The index tracks contract signings for previously owned homes. Purchases typically close within a month or two of signing.

The U.S. housing market has been squeezed by fast-rising prices and limited inventory. Sales of both newly built and existing houses slid last month and home construction also has slumped, with housing starts declining in four of the past five months.

"The reality...is that sales in coming months will not break out unless supply miraculously improves," said Lawrence Yun, the trade group's chief economist. "This seems unlikely given the inadequate pace of housing starts in recent months and the lack of interest from real estate investors looking to sell."

Mortgage rates remain low and have moved lower since early 2017, but are up compared with last summer. The average interest rate on a 30-year fixed-rate mortgage in July was 3.97%, up from 3.9% in June and 3.44% in July 2016, according to Freddie Mac.

News Corp, owner of The Wall Street Journal, also operates Realtor.com under license from the National Association of Realtors.

Write to Ben Leubsdorf at ben.leubsdorf@wsj.com

(END) Dow Jones Newswires

August 31, 2017 10:14 ET (14:14 GMT)