Published July 10, 2023
Sharp Drop in Pending contracts
Sharp Drop in Pending contracts
John A. Sposato
Well, the Federal Reserve has continued its policy of tightening its grip on the economy, trying to slow down the inflation rate… Last week they raised interest rates again, on the heels of a stronger than expected employment report, increasing the popular 30 year mortgage rate up to 7.22%....this is the highest its been since November!
As a result, the number of pending contracts dropped sharply again over the last two weeks, following the trend of these decrease in pending contracts week over week for the past 10 weeks.
Decrease in Pending Homes in Phoenix MLS
As a result of this most recent hike, I believe we will start to see even less homes going under contract, as we see a decrease in loan applications, followed by a decrease in Pendings.
Related to this decrease in homes going under contract, we are also seeing a flattening of inventory…We started the year with over 15,000 homes for sale, but inventory has been steadily decreasing week over week all year long...but as we have seen a slow down of homes going under contract, inventory has remained just over 10,000 homes now for the last 4-5 weeks.
Inventory of Homes in Phoenix MLS
My prognosis is that we're going to have a very lackluster July and August… I think pending contracts will slow down even more over the next few weeks, and inventory will remain flat…
