Pending home sales in the United States fell for the second month in a row in July.

Contracts to acquire previously owned houses in the United States fell for the second month in a row in July, reflecting limited availability that has been unable to keep up with demand from potential purchasers.

The National Association of Realtors (NAR) said on Monday that its Pending Home Sales Index, which is based on contracts signed in the previous month, declined 1.8% in July after falling a revised 2.0% in June. Reuters polled economists, who predicted a 0.4% increase in pending house sales.

Because they become sales one to two months later, pending house contracts are seen as a forward-looking sign of the housing market’s health.

“The market may be cooling slightly, but there is currently insufficient supply to meet the demand from would-be purchasers,” Lawrence Yun, NAR’s chief economist, said in a statement. “Inventory is gradually rising, and house buyers should see more alternatives in the coming months.”

Home prices have risen across the country, owing in large part to a lack of supply, with the median price for new single-family homes now above $390,000 and for existing homes slightly under $360,000. Pending home sales were down 8.5% from a year earlier.

“The very competitive real estate market we witnessed in the first six months of 2021 compressed available inventory to record lows and pushed prices to new highs just as summer arrived, leaving many first-time buyers dissatisfied,” said George Ratiu, Realtor.com’s manager of economic analysis. “However, in a significant shift, homeowners began advertising properties in greater numbers in response to market trends.”

Only the West area had a month-over-month increase in contract activity in July, while the Midwest, Northeast, and South all saw reductions. On a year-over-year basis, transactions decreased in all four areas.

“Homes for sale are still attracting a lot of attention,” Yun said, “but the multiple, frantic offers – often double-digit bids on one home – have subsided in most locations.” “Even in a slightly calmer market, a percentage of potential purchasers are still opting to forego appraisals and inspections.”

In July, existing home sales climbed for the second month in a row as inventories improved considerably.

Last month’s uptick in new house sales came after three months of decreases.