Pending Home Sales Leap 4.8% Annually in May as Buyers Join Late-Spring Rush

Pending home sales increased by 3.8% month-over-month and 4.8% year-over-year in May, indicating a surge in buyer activity as mortgage rates stabilized around 6.5%. The National Association of Realtors (NAR) reported that this late-spring buying rush suggests homebuyers are adapting to current borrowing costs, even amidst geopolitical concerns. NAR Chief Economist Lawrence Yun noted that elevated mortgage rates are not preventing buyers from entering the market and predicted that falling oil prices could lead to modest mortgage rate declines, though federal borrowing and AI investment spending might temper this effect. All four major U.S. regions experienced significant gains in pending home sales in May. The Northeast saw an 8.7% monthly increase and a 6.1% annual rise, while the Midwest reported an 8.1% monthly and 9.3% annual jump. The South recorded a 1% monthly and 3.3% annual increase, and the West saw a 0.7% monthly and 1.2% annual gain. The Northeast, an inventory-constrained region with faster home price growth, showed increased buyer contract signings, though Yun emphasized the need for more supply to moderate price increases. Among the 50 largest metropolitan areas, Kansas City, MO, saw the largest year-over-year gain at 20.1%, followed by San Antonio at 15.7% and Minneapolis at 13.9%. Realtor.com® senior economist Hannah Jones commented that despite rising mortgage rates throughout May, influenced by the conflict in Iran and oil price shocks, buyers and sellers found agreement due to easing home prices. Listing prices decreased by 2.4% in May, and the proportion of price reductions also grew, contributing to the market's resilience.