Pending home sales reached a 44.3 percent monthly increase in May—a new record, according to the National Association of REALTORS® (NAR).
After two previous months of declines, pending home sales are showing a market rebound, with every major region recording a month-over-month increase. According to NAR, the Pending Home Sales Index (PHSI) increased to 99.6 in May—the highest MoM growth since NAR began the series in January 2001. Since the same time last year, pending home sales have fallen 5.1 percent.
NAR expects existing home sales to reach 4.93 million units in 2020, with new home sales potentially hitting 690,000. In addition, in 2021, NAR expects sales to rise to 5.35 million units for existing homes and 800,000 for new homes.
Regional Breakdown:
Northeast
+44.4% MoM – Now 61.5 PHSI
-33.2% YoY
Midwest
+37.2% MoM – Now 98.8 PHSI
-1.4% YoY
South
+43.3% MoM – Now 125.5 PHSI
+1.9% YoY
West
+56.2% MoM – 89.2 PHSI
-2.5% YoY
“This has been a spectacular recovery for contract signings, and goes to show the resiliency of American consumers and their evergreen desire for homeownership,” said Lawrence Yun, NAR’s chief economist. “This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”
“More listings are continuously appearing as the economy reopens, helping with inventory choices,” Yun said. “Still, more home construction is needed to counter the persistent underproduction of homes over the past decade. The outlook has significantly improved, as new home sales are expected to be higher this year than last, and annual existing-home sales are now projected to be down by less than 10 percent—even after missing the spring buying season due to the pandemic lockdown.”
“All figures light up in 2021 with positive GDP, employment, housing starts and home sales,” Yun added.
“New home sales took a similar upward turn last week, but today’s pending data is a more important indicator of market activity since it covers existing homes, which made up roughly 80 to 90 percent of sales in recent years. This move confirms that May closings could represent a low-point for home sales, with June and July numbers looking much better,” Danielle Hale, chief economist at realtor.com®, said in a statement.
For more information, please visit www.nar.realtor.
