Pending home sales fell 1.8% in July, marking the second consecutive month of declines and showing signs of a slowdown in the housing market, according to the National Association of Realtors.

Year-over-year signings fell 8.5%. Sales are considered pending when a contract is signed but the transaction hasn’t closed.

"The market may be starting to cool slightly, but at the moment there is not enough supply to match the demand from would-be buyers," said Lawrence Yun, NAR's chief economist. "That said, inventory is slowly increasing and home shoppers should begin to see more options in the coming months.

"Homes listed for sale are still garnering great interest, but the multiple, frenzied offers – sometimes double-digit bids on one property – have dissipated in most regions," Yun said. "Even in a somewhat calmer market, a number of potential buyers are still choosing to waive appraisals and inspections."

A full 27% of buyers have been able to bypass appraisal as they look to accelerate the process, according to Yun.

Mortgage interest rates also fell in July, with the average on 30-year fixed mortgages falling from 3.18% to 2.84%, according to Mortgage News Daily. That drop gives buyers more purchasing power which will help those afford a home with a high price. 

The sales index varied depending on what region of the country a particular buyer resides. The Northeast saw the pending sales index fall 6.6% to 92 and was down 16.9% year-over-year. The Midwest saw a decline of 3.3% to 104.6 last month. 

The South saw sales fall 0.9% for the month and were down 6.7% annually. The West was the only region that saw a sales increase in July, rising 1.9% monthly, but down 5.7% annually.