Contract Signings Slowed, but Silicon Valley’s Jobs and Tight Inventory Tell a Bigger Story

Housing activity slowed again in July.

Nationally, pending home sales fell 2.3% from June and 2.2% from a year earlier, reaching their lowest level since January. Higher mortgage rates and record home prices continue to challenge affordability.

That headline matters, but it does not tell the whole story for Silicon Valley.

Locally, inventory remains tight, Santa Clara County home prices are holding up, and employment is still growing. Those factors could continue to support housing demand even while some buyers take more time to make a decision.

Fewer Buyers Are Signing Contracts Nationally

NAR’s Pending Home Sales Index measures signed contracts, making it an early indicator of future closed sales.

In July, contract signings declined 2.3% month over month and 2.2% year over year. The national median existing-home sales price was $434,100, while 30-year mortgage rates averaged 6.54% during the month.

That combination helps explain why some buyers are hesitating.

A higher purchase price paired with borrowing costs in the mid-6% range can significantly change the monthly payment.

But slower contract activity also creates opportunities for buyers who remain in the market.

Buyers Have More Room To Negotiate in Some Situations

NAR reports that 20% of active listings nationally had a price reduction in July.

Buyers are also finding leverage through closing-cost assistance, rate buydowns, repair credits, inspection negotiations, and more flexible timing.

That does not mean every buyer should automatically offer below asking.

The strongest listings can still create competition. NAR specifically notes that homes that are prepared, presented, and priced well can generate a very different buyer response.

That distinction is particularly important in Silicon Valley.

Santa Clara County Is Still a Tight Market

California housing activity also slowed in July. Statewide pending sales declined 6.8% from June, although they remained 1% higher than July 2025.

Santa Clara County, however, continues to operate with relatively limited inventory.

The July median single-family home price was $1.955 million, up 2.9% from a year earlier. Unsold inventory increased slightly to 1.9 months, while the median market time was just 13 days.

The broader Bay Area remained California’s tightest major region, with 2.3 months of inventory in July compared with 3.4 months statewide.

That is why the Silicon Valley market can feel contradictory.

Overall sales activity may slow while an individual well-priced home still receives significant attention.

Jobs May Be the Next Important Housing Indicator

NAR’s latest report makes another important point: watch employment.

National payroll employment is approximately 5% above its pre-pandemic 2019 level while pending home sales remain roughly 30% below. NAR views that gap as evidence of potential housing demand that could emerge over time if affordability improves and more homes become available.

That is not a prediction or guarantee.

But employment matters because people generally need confidence in their income before making a major housing decision.

And Silicon Valley’s latest employment numbers deserve attention.

Silicon Valley Is Still Adding Jobs

The San Jose, Sunnyvale, and Santa Clara metros had approximately 1.176 million nonfarm jobs in June, up 1.4% from a year earlier. The unemployment rate was 4%.

The growth is not uniform across every industry.

Education and health services employment was up 6.1% year over year, construction was up 8%, and information employment was up 0.6%. Professional and business services were essentially flat.

That mixed picture is worth watching.

Silicon Valley does not need every industry to grow at the same rate for employment to influence housing demand. But the strength and direction of the local job market can affect buyer confidence, relocation activity, and purchasing power.

What This Means for Buyers

Slower overall activity can create openings.

A home that has been sitting for several weeks, has already reduced its price, or has limited competition may give a buyer more room to negotiate.

But evaluate the property, not the headline.

Santa Clara County still has only 1.9 months of single-family inventory. A desirable home priced correctly may not provide the same leverage as a property struggling to attract buyers.

Know your comfortable payment. Understand the comparable sales. Watch the competition. Then structure the offer around what is actually happening with that home.

What This Means for Sellers

The market is asking more from sellers.

Limited inventory remains an advantage, but it does not eliminate buyer sensitivity to price.

Preparation, presentation, and pricing matter because today's buyers have substantial monthly costs and are paying close attention to value.

The strongest seller strategy is not simply to ask the highest possible price. It is to position the home so buyers understand why it deserves their attention.

The Bottom Line

National contract signings slowed in July, largely because affordability remains difficult.

But Silicon Valley has several counterweights: limited inventory, a Santa Clara County median price that remains above last year, and a local employment base that is still growing.

For buyers, slower activity may create opportunities.

For sellers, strong preparation and realistic pricing remain important.

And for both sides, the local job market may be one of the more useful indicators to watch next.