US pending home sales slow a tick from July boom

US pending home sales slowed a bit in August after July’s strong pace, the National Association of Realtors said Monday.

The pending home sales index dipped 1.0 percent to 104.7 in August, after reaching a revised 105.8 in July, the highest level since August 2013, NAR said.

The index, a forward-looking indicator based on contract signings, showed declines in all major regions except for the West, where pending home sales rose for the fourth straight month.

Contract signings in the West broke above the index’s 100 reading, considered an average level of activity, hitting 102.1.

“Fewer distressed homes at bargain prices and the acknowledgement we’re entering a rising interest rate environment likely caused hesitation among investors last month,” said Lawrence Yun, NAR’s chief economist.

“With investors pulling back, the market is shifting more towards traditional and first-time buyers who rely on mortgages to purchase a home.”

According to NAR’s latest outlook, the Fed’s first increase in the federal funds rate, pegged at zero to 0.25 percent since late 2008, will come in the second quarter next year.

The industry group projected the benchmark 30-year mortgage rate would rise in April-June quarter to 5.0 percent, from 4.2 percent in the current year.

August contract signings were down 2.2 percent from a year ago amid a slowing recovery in the housing market.

NAR said sales of existing homes, the largest segment of the market, would likely accelerate in the second half of the year due to improved inventory conditions, low interest rates and slower price growth.

Recent housing market data has been mixed. In August, existing-home sales fell 1.8 percent after four straight months of gains, a slowdown NAR attributed to a sharp exodus of investors who had been snapping up properties in all-cash deals.

However, new-home sales soared 18 percent in August to the fastest pace in more than six years, suggesting housing demand had stabilized in recent months.