Pending Home Sales Plunge 5.4% in June as Prices Surge to Record High

Pending home sales retreated in June on both a monthly and annual basis, driven down by mortgage rates climbing to a 10-month high and home prices setting a new record.

Contract signings plunged 5.4% compared to May and ticked down 0.3% from a year ago, according to the National Association of Realtors^® Pending Home Sales report released Thursday.

The month-over-month pullback was recorded across the U.S., while year-over-year pending sales dipped in the South and West but increased in the Northeast and Midwest.

NAR Chief Economist Lawrence Yun attributes the slide to challenging economic conditions, including mortgage rates averaging 6.49% in June, the highest since August 2025, according to Freddie Mac.

Meanwhile, the median sales price continued rising, edging up 1.8% to $440,600, an all-time high.

"The highest mortgage rates in nearly a year and the record-high national median home price together are contributing to a tepid housing market that is especially difficult for first-time homebuyers," says Yun. "However, job gains can help support housing demand."

Regionally, the Midwest experienced the biggest month-over-month decrease in pending sales, which fell 8.9%, followed by the West (-4.7%), the South (-4.1%), and the Northeast (-3%).

Looking at annual changes in contract signings, the Northeast saw an increase of 2.2%, while the Midwest ticked up just 0.3%.

On the other hand, pending sales dipped 1.1% year over year in the West and 0.9% in the South.

At the metro level, Virginia Beach, VA, was June's biggest winner among the nation's 50 largest markets, with contract signings there surging 15.4% annually, followed by Sacramento, CA (+15.2%), and Kansas City, MO (+14.4%).

"It is worth emphasizing that it is closing activity, not contract signings, that generates economic impact," stresses Yun. "Pending contracts are only suggestive of upcoming closed deals and do not align perfectly, due to fallout rates and contract contingencies."

What this means for homebuyers

Pending home sales mark the first formal step in the homebuying process and typically lead closings by one to two months, making them a useful gauge of near-term activity. A slight uptick in May translated into existing home sales climbing in June for the third consecutive month.

Realtor.com® senior economist Hannah Jones says that although mortgage rates remained elevated in June, they were still below year-ago levels, offering buyers lower financing costs at the same time that still-rising inventory continued the market’s shift toward greater favorability.

Looking ahead, Jones says that the summer market is poised to remain steadily positive, yet quieter than a typical pre-pandemic summer. Notably, June inflation data showed softening price growth, with headline inflation falling to 3.5% and core inflation easing to 2.6%.

"That softness could open the door to lower mortgage rates, offering some added fuel to the summer housing market," she says.

The Realtor.com Midyear Forecast Update projected mortgage rates holding steady at 6.3% by the end of 2026, while forecasts for existing home sales, home prices, and inventory growth were revised lower.

"We still expect these metrics to post year-over-year gains, but the first half of 2026 saw more tempered growth than anticipated, lowering expectations for the year as a whole," says Jones. "On the positive side, affordability should improve in 2026, with the typical monthly payment running 1.9% below last year's level." 

Metros with biggest pending home sale increases in June

1. Virginia Beach, VA (+15.4%)
2. Sacramento, CA (+15.2%)
3. Kansas City, MO (+14.4%)
4. Richmond, VA (+14%)
5. Buffalo, NY (+12.1%)
6. Austin, TX (+11.1%)
7. San Francisco, CA (+9.4%)
8. Los Angeles, CA (+9.6%)
9. Miami, FL (+9.5%)
10. St. Louis, MO (+9.1%)