WASHINGTON, Aug 24 Reuters Contracts to buy U.S. previously owned homes fell less than expected in July as mortgage rates eased a bit, pulling some buyers back into the housing market.

The National Association of Realtors NAR said on Wednesday its Pending Home Sales Index, based on signed contracts, dropped 1.0 to 89.8 last month, the lowest level since April 2020. Contracts have declined in eight of the last nine months.

In July, contracts fell in the Northeast, South and Midwest, but rose in the West.

Economists polled by Reuters had forecast contracts, which become sales after a month or two, would drop 4.0. Pending home sales tumbled 19.9 in July on a yearonyear basis.

The 30year fixedrate mortgage retreated from 5.78 in midJune to 5.30 at the end of July, according to data from mortgage finance agency Freddie Mac. The rate at the start of the year was 3.22.

In terms of the current housing cycle, we may be at or close to the bottom in contract signings, said Lawrence Yun, the NAR39;s chief economist. Inventories are growing for homes in the upper price ranges, but limited supply at lower price points is hindering transaction activity.

The housing market is the main area of the economy where the Federal Reserve39;s aggressive monetary policy tightening campaign to slow demand in order to tame inflation is achieving some results. Data on Tuesday showed new home sales plunged to a 612year low in July.

Home resales and singlefamily housing starts are at twoyear…