by Quinton Simmons, NAR® Media Contact
Pending home sales rebounded strongly in May, reaching the highest reading ever for the month of May since 2005, according to the National Association of Realtors®. All four U.S. regions registered both month-over-month increases and year-over-year gains for pending home sales contract transactions for the month of May.
The Pending Home Sales Index (PHSI),* www.nar.realtor/pending-home-sales, a forward-looking indicator of home sales based on contract signings, rose 8.0% to 114.7 in May. Year-over-year, signings increased 13.1%. An index of 100 is equal to the level of contract activity in 2001.
"May's strong increase in transactions – following April's decline, as well as a sudden erosion in home affordability – was indeed a surprise," said Lawrence Yun, NAR's chief economist. "The housing market is attracting buyers due to the decline in mortgage rates, which fell below 3%, and from an uptick in listings."
Although there has been a series of obstacles over the last year, including an unprecedented pandemic, record-high prices, and all-time low inventory, buyers are still lining up at a feverish pace, according to Yun.