Key facts
- Pending home sales rose 3.8% month-over-month and 4.8% year-over-year in May.
- Growth was observed across all four U.S. regions.
- Mortgage rates have remained below 7% this year due to improved mortgage spreads.
- Housing inventory is at healthier levels compared to 2020-2023.
- Wages are now outpacing home price growth.
Pending home sales in the U.S. saw a notable increase in May, rising 3.8% from the previous month and 4.8% compared to the same period last year, according to the National Association of REALTORS®. This growth occurred across all major regions of the country, including the Northeast, Midwest, South, and West.
The positive trend defied expectations for some observers who anticipated a decline in sales due to rising mortgage rates. However, the report suggests that current mortgage rates have remained below the critical 7% threshold this year, largely due to improved mortgage spreads. This has kept rates closer to the 6% range, a level historically associated with improved housing demand.