Pending Home Sales Continue To Rise

pending home sales continue to rise

Pending home sales increased in May, according to the National Association of Realtors® (NAR). Three of the four major regions saw growth in contract activity, with the West experiencing a slight sales decline.

Pending home sales are when there is a contract on a home but it has not closed yet and this index is a forward looking indicator for housing sales. The Pending Home Sales Index, climbed 1.1% to 105.4 in May, up from 104.3 in April.

Lawrence Yun, NAR chief economist, said lower-than-usual mortgage rates have led to the increase in pending sales for May. “Rates of 4% and, in some cases even lower, create extremely attractive conditions for consumers. Buyers, for good reason, are anxious to purchase and lock in at these rates.”

Yun said consumer confidence about home buying has risen, and he expects more activity in the coming months. “The Federal Reserve may cut interest rates one more time this year, but there is no guarantee mortgage rates will fall from these already historically low points,” he said. “Job creation and a rise in inventory will nonetheless drive more buyers to enter the market.”

Source: National Association of Realtors