Mirroring the trend for new home sales, pending home sales fell 7.1% in August, according to data released Thursday by the National Association of Realtors (NAR).  All four regions of the U.S. posted month-over-month and year-over-year declines in transactions.

Year over year, pending home sales were down 18.7%, an even greater decrease than the 14% annual drop recorded in July. Despite falling in August, new home sales remained 5.8% higher than the previous year, while pending home sales continued to lag last year’s levels.

The NAR’s Pending Home Sales Index fell to a reading of 71.8 in August. An index of 100 is equal to the level of contract activity in 2001.  Existing home sales also fell in August, down 15.3% below the August 2022 level.

Pending home sales are based on contract signings.

“Mortgage rates have been rising above 7% since August, which has diminished the pool of home buyers,” Lawrence Yun, NAR chief economist said. “Some would-be home buyers are taking a pause and readjusting their expectations about the location and type of home to better fit their budgets.”