The numbers: U.S. home sales inched up for the second month in a row, as the housing market continues to be hampered by high rates and a lack of home listings.

Pending home sales rose by 0.9% in July from the previous month, according to the monthly index released Thursday by the National Association of Realtors.

The figure exceeded expectations on Wall Street. Economists were expecting pending home sales to fall 0.5% in July.

Transactions were still down 14% from last year.

Pending home sales reflect transactions where the contract has been signed for the sale of an existing home, but the sale has not yet closed. Economists view it as an indicator for the direction of existing-home sales in subsequent months.

Big picture: High rates and home prices have sent many potential buyers to the sidelines, but those who are purchasing a home out of necessity, or who have the ability to make a cash offer, are still pushing through.

Sales activity was a lot less brisk in July due to the ongoing inventory issue and with the 30-year loan rate at or near the 7% range. And with rates hitting a multidecade high in August, expect the data to continue to show a housing market that’s dragging along.

What the realtors said: “The small gain in contract signings shows the potential for further increases in light of the fact that many people have lost out on multiple home buying offers,” said Lawrence Yun, chief economist at the NAR.

“Jobs are being added and thereby enlarging the pool of prospective home buyers,” he added. “However, rising mortgage rates and limited inventory have temporarily hindered the possibility of buying for many.”

Market reaction: Stocks were up in early trading on Wednesday. The yield on the 10-year Treasury note was around 4.1%.

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