Pending Home Sales Post Surprise Increase In May, Likely Due To Brief Pullback In Mortgage Rates
According to the National Association of Realtors, pending home sales—a gauge of contracts to buy existing homes—rose modestly in May, up 0.7 percent from April. That ended a six-month trend of dropping demand. Sales were still 13.6% below May 2021 levels.
Mortgage rates have been on the rise for buyers since the beginning of the year, but in May, they started to decline slightly, which may be the cause of the increase in sales. The overall active inventory climbed as more supply entered the market, and some homes remained on the market for longer.
As per Realtor.com, the number of homes for sale has finally started to increase, up 21 percent from a year ago. However, it is still only approximately 50% of pre-Covid levels. Additionally, the median listing price increased by around 17% last week, remaining stable for the third week in a row.