US Pending Home Sales Increase 1.1% Year-Over-Year in May Amidst Rising Rates

May Pending Home Sales Data

• 📈 Pending home sales in May saw a 1.8% increase from April and a 1.1% rise compared to May of the previous year, according to the latest data.
• 🎯 This figure represents a slight beat, as the market was anticipating a nearly flat performance.
• ⚠️ The data is based on signed contracts made in May, a period when mortgage rates for a 30-year fixed loan briefly surpassed 7%.

Regional Sales Performance

• 🗺️ Month-to-month sales showed the strongest performance in the Northeast and West regions.
• 📉 However, when compared to the previous year, sales declined across most regions, with the South and Midwest being the only exceptions.

Factors Influencing Housing Market

• 💡 The modest gain in sales, despite rising rates, is likely attributed to an increase in housing supply, with 31.5% more homes available than last year.
• ⏳ Despite the slight year-over-year increase, the pending home sales index remains near its lowest level in 24 years, comparable to the pandemic shutdown month of April 2020.
• 🏠 A recent report on new home sales showed a significant drop of over 13%, partly due to higher prices and a scarcity of entry-level new builds.
• 💰 Affordability remains a critical challenge in today's housing market.