Pending home sales post surprise increase in May, likely due to brief pullback in mortgage rates

A house’s real estate for sale sign shows the home as being “Under Contract” in Washington, DC.

The National Association of Realtors says that pending home sales rose in May.

It was the first time in six months that demand had risen. The sales were lower in May than they were in May.

Mortgage rates have risen since the start of the year, but they retreated slightly in May, which may account for the sales gain. The total active inventory increased as some homes sat on the market longer.

It went back up to over 6% by the middle of June.

The housing market is clearly undergoing a transition despite the small gain in pending sales from the prior month. Contract signings are down from a year ago.

The supply of homes for sale is up 21% from a year ago Half of pre-covid levels are still present. The median listing price was stable for the third week in a row.

In the Northeast, pending home sales rose and fell from last month. Sales in the Midwest were down from a year ago.

Sales in the South were down 13.8% year over year. Home sales in the West fell the most, down 19.8% from the year before.

George Ratiu said the costs of financing a home purchase remained elevated even though interest rates fell. The economy is reaching for its post-pandemic reality at the halfway point of the year.