What did pending home sales look like in May?
Pending home sales increased in May in all four regions across the nation, the National Association of Realtors (NAR) said in a report released today. It’s a sign that the housing market is opening up to buyers as more homes come up for sale during the traditional warm weather homebuying season.
The NAR’s chief economist expressed optimism that sales will improve more as mortgage interest rates drop and wages increase.
"Consistent job gains and rising wages are modestly helping the housing market," NAR Chief Economist Lawrence Yun said. “Hourly wages are increasing faster than home prices. However, mortgage rate fluctuations are the primary driver of homebuying decisions and impact housing affordability more than wage gains.”
Pending home sales are indicators of the direction of the housing market in general based on purchase contracts signed for homes for sale.
Which regions showed changes in pending home sales?
All four regions the NAR tracks in the U.S. showed increases in pending sales in May from the previous month, though pending sales in two regions dropped slightly over last year.
- The West saw a jump of 6% in pending home sales from the previous month, down 1.2% from a year ago.
- The Northeast experienced a 2.1% increase in pending home sales from last month, down 0.5% from a year ago.
- Signed contracts in the South grew 1% from the previous month, up 2% from the previous year.
- Pending sales in the Midwest increased 0.3% from the previous month and increased 2.6% from the same time last year.
Other signals in the economy are affecting the prices of homes and their overall affordability, the NAR report indicated.
“The Northeast's housing shortage is boosting home prices, with more than a quarter of homes selling above list price," Yun added in the NAR report. “Conversely, more inventory in the South gives homebuyers greater negotiation power. Price declines in the South should be considered temporary given the region's strong job creation."
Wintertime and the holiday season, now fully behind us, tend to be slower periods for home sales, and contract signing could pick up even more as mortgage interest rates decline and the weather warms up even more heading deeper into the traditional spring and summer homebuying season.
Did mortgage rates show any change?
According to data from Freddie Mac, the 30-year fixed rate mortgage averaged 6.81% as of June 18*. That’s down from 6.84% one week ago and down from 6.87% one year ago.
Progress on mortgage rates cooling off would be a welcome sign to prospective homebuyers. A decrease in mortgage rates could also signal movement in the housing market as we head further into the traditional warm weather homebuying season.
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*National average rates from Freddie Mac as of June 18, 2025, are not advertised rates from OriginPoint.
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