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July pending sales were flat as the housing market entered a third quarter of rising inventory and declining mortgage rates.

Sellers accepted 176 new contracts, 34 fewer than the previous month and 50 more than July last year, according to the Northeast Tennessee Association of Realtors (NETAR).

Pending sales are a leading indicator of housing activity based on signed contracts for existing single-family home and condominium sales in the region monitored by NETAR. Since resales go under contract 30 to 60 days before they close, pending sales offer insight into the market’s direction.

Activity was down in the affordable market and up in the move-up and luxury markets. There were 261 pending sales in the affordable market, down seven from last year. The move-up market had 317 pending sales, up seven from last year. The luxury market had 105 pending sales, up 22 from last year.

Fewer second-quarter sales allowed inventory a 36.8% breather. At month’s end, the region had 2.9 months of inventory, a five-year high.

Realtors are reporting fewer multiple offers and more concessions for deals in the move-up and luxury markets. Competition continues to be high in the affordable-priced homes market.