Pending home sales eked out a 1.8% month-over-month gain in May and rose 1.1% compared to the prior year, according to the latest report from the National Association of Realtors (NAR).
The data showed all four U.S. regions experienced monthly gains in pending home sales last month. The West led with a 6% increase, followed by the Northeast at 2.1%, the South at 1% and the Midwest at 0.3%.
“Consistent job gains and rising wages are modestly helping the housing market,” NAR Chief Economist Lawrence Yun said in a press release. He added that while hourly wages are accelerating at a faster pace than home prices, “mortgage rate fluctuations are the primary driver of homebuying decisions and impact housing affordability more than wage gains.”
The 30-year fixed-rate mortgage dipped five basis points to average 6.76% during the first week of May. It stayed near that mark for the first half of the month before rising to 6.89% during the week ending May 29, according to Freddie Mac data.
First American Deputy Chief Economist Odeta Kushi observed in an analysis that “the May uptick followed a large dip in April, despite a steady upward trend in mortgage rates.”
“Even this modest increase in pending home sales is a welcome sign for a beleaguered housing market,” Kushi said. “The 2025 homebuying season may yet show some signs of life, as purchase mortgage applications — a separate leading indicator of housing activity — have also registered modest gains in May and June.”
A Redfin report released Thursday suggests that those modest gains may be short-lived. The real estate brokerage reported that pending home sales fell 2.3% year over year during the four weeks ending June 22, the biggest decline in three months.
Redfin cited rising home sale prices, stubbornly high mortgage rates and economic jitters among consumers as reasons for the downturn.
