According to Realtor.com Research, pending home sales declined in July as mortgage rates climbed higher due to renewed geopolitical concerns that pushed oil prices up and put pressure on rates and inflation. Contract signings fell both compared to the previous month and compared to the same time last year, as those rate increases of more than twenty basis points throughout July started to eat away at the affordability gains buyers had been enjoying earlier in the spring.
The picture from the data wasn't one of panic though. Even as contract signings softened, asking prices continued their downward trend for a ninth straight month as sellers became more realistic about what the market would bear. Homes were also moving faster than they had a year earlier, marking the first time in over two years that we saw that kind of improvement. What we were looking at was really just a seasonal summer slowdown rather than anything more dramatic.
The national data masks some pretty significant regional differences. Realtor.com's hottest markets right now are clustered in the Northeast and Midwest, where limited inventory keeps things competitive and moving quickly. Out here in the West and across the South, the dynamic has flipped toward buyers, with more homes available, less bidding wars, and real room to negotiate. That split between regions seems likely to continue through the rest of the year.
All four major regions saw contract signings decline in July, but the West felt it most acutely with a monthly drop that outpaced the others. Looking at year-over-year numbers, the Midwest was the only region showing growth, while the West actually saw the biggest annual decline among all regions. When you drill down to individual metro areas, markets like Virginia Beach, San Antonio, and Cincinnati led the way in year-over-year contract growth.
As we head into late summer, the typical seasonal patterns probably continue, with more inventory hitting the market and more sellers cutting prices as families focus on school year planning. That shift could open up real opportunities for buyers who are still active, especially if rates ease up a bit. The real question nobody can answer yet is whether this slowdown is just the normal summer rhythm we see every year or whether something more significant is shifting.
What I am seeing locally here in the Bay Area and the East Bay mirrors what the data is telling us nationally. We're in one of those West Coast markets where conditions have definitely tilted more toward buyers compared to the competitive frenzy we saw a couple of years ago. Fremont and the surrounding communities have inventory, which means our buyers have choices and negotiating power they didn't have before. That's a real change in dynamics for anyone trying to make a move right now.
