The National Association of Realtors (NAR) announced on Monday its seasonally adjusted pending home sales index (PHSI) fell 1.8 percent m-o-m to 110.7 in July, after a revised 2.0 percent m-o-m drop in June (originally a 1.9 percent m-o-m decrease).

Economists had expected pending home sales to increase 0.4 percent m-o-m in July.

On y-o-y basis, the index plunged 8.5 percent after a revised 2.0 percent decline in June (originally a 1.9 percent fall).

According to the report, three of the four regional indices recorded m-o-m declines in July and all four regions registered y-o-y drops.

The Northeast PHSI tumbled 6.6 percent m-o-m to 92.0 in July, a 16.9 percent decrease from a year ago. In the Midwest, the index fell 3.3 percent m-o-m to 104.6, down 8.5 percent from July 2020. Pending home sales in the South went down 0.9 percent m-o-m to an index of 130.9 in July, down 6.7 percent from July 2020. At the same time, the index in the West increased 1.9 percent m-o-m in July to 99.8, but still down 5.7 percent from a year prior.

"The market may be starting to cool slightly, but at the moment there is not enough supply to match the demand from would-be buyers," noted Lawrence Yun, NAR's chief economist. "That said, inventory is slowly increasing and home shoppers should begin to see more options in the coming months.”