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Pending Home Sales Hit 6-Month High on Rate Ease
The NAR's pending home sales index rose 3.8% to 76.8 in May, the fourth straight gain and highest since November. Mortgage rates below 7% are drawing buyers back, though inventory remains tight and prices are at records.
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The National Association of Realtors said its pending home sales index jumped 3.8% in May to 76.8. That was the highest reading since November and the fourth straight monthly gain. April's index was revised slightly higher to 74.0 from a previously reported 73.9.
The index tracks contract signings, which typically close within 30 to 60 days. The May data points to an increase in existing home sales during June and July, the NAR said. Existing home sales, counted at closing, have already risen for two straight months through April. The pending sales figures suggest that momentum carried into May.
Mortgage rates have pulled back from the 8% peak hit in October 2023. The 30-year fixed rate averaged 6.95% in May, down from 7.17% in April, according to Freddie Mac. That decline appears to be drawing buyers back into the market. The four months of gains in contract signings represent the longest such streak since the Federal Reserve began raising rates in 2022.