PhotoFor the fourth time in five months, pending home sales have moved lower.

The National Association of Realtors (NAR) reports Pending Home Sales Index (PHSI) -- a forward-looking indicator based on contract signings -- dipped 0.8% in July to 109.1.

The index, which has fallen on an annual basis in three of the past four months, is now 1.3% below a year ago.

Inventory and pricing raise concerns

According to analysts, it's inventory woes throughout the country that are stalling contract activity. “The housing market remains stuck in a holding pattern with little signs of breaking through'” said NAR Chief Economist Lawrence Yun. “The pace of new listings is not catching up with what’s being sold at an astonishingly fast pace.”

Affordability is another concern. Yun says that in the past five years, the national median sales price has risen 38%, while hourly earnings have increased less than a third of that (12%).

This unsustainable trend, he says, is putting considerable pressure on affordability in some markets -- especially for prospective first-time buyers -- and is pricing out some households who would otherwise be looking to buy a home.

Regional breakdown

  • The PHSI in the Northeast slipped 0.3% in July to 97.7%,, but is still up 2.4% from a year ago.
  • In the Midwest the index dipped 0.7% to 103.3, and is now 2.8% percent lower than in July 2016.
  • Pending home sales in the South were down 1.7% to a reading of 123.1 and are now 0.2% below last July.
  • The only increase was in the West where the PHSI inched up 0.6% to 102.3, but is still 4.0% below a year ago.  

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