Home sales under contract notched marginal year over year gains in July, rising 0.7% from the same month a year ago, though falling 0.4% from June.

Pending sales declined in the Northeast and West on an annual basis but increased in the Midwest and South according to pending sales figures released by the National Association of Realtors (NAR) on Thursday.

Despite improved purchasing power and affordability conditions for homebuyers last month, hesitance may have kept more prospective homeowners from signing contracts.

“The Federal Reserve signaling that they may enact a lower interest rate policy should steadily enlarge the pool of eligible home buyers in the upcoming months,” noted Lawrence Yun, chief economist at the NAR, in a press release.

On a monthly basis, pending sales declined in the Northeast and Midwest, remained flat in the South and rose in the West.

“Even with modest improvements in mortgage rates, housing affordability, and inventory, buyers still remain hesitant,” Yun continued, adding that “going under contract is not a decision home buyers make quickly.”

A recent Redfin analysis of multiple listing service pending-sales data shows home purchase agreement cancellations soared in July, with roughly 15% of purchase contracts falling through, a 14.5% increase from July 2024.