🔑 Key Highlights:
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Pending home sales rose 1.8% in May, reversing a slide from the previous month.
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Northeast and Midwest led the gains, while the South and West saw declines.
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Contract signings remain down 6.6% year-over-year, indicating ongoing market challenges.
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NAR Chief Economist Lawrence Yun says mortgage rates remain the biggest market factor.
📈 Pending Home Sales Tick Up in May, but Market Challenges Persist
The National Association of REALTORS® (NAR) reported a 1.8% increase in pending home sales for May 2025, signaling a modest rebound after April’s decline. While this rise is a welcome development, pending sales remain 6.6% below levels from a year ago, underscoring the persistent strain from affordability issues and elevated mortgage rates.
“The market is clearly in a push-pull dynamic,” said NAR Chief Economist Lawrence Yun. “On one hand, buyers are eager, and when rates dip slightly, we see immediate movement. On the other hand, inventory and affordability remain barriers.”
Regional Breakdown:
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Northeast: +1.1% in May, down 2.3% year-over-year
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Midwest: +5.7% in May, down 5.6% year-over-year
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South: -0.3% in May, down 10.4% year-over-year
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West: -0.4% in May, down 2.1% year-over-year
Despite the uptick, market activity remains constrained compared to historic norms. Many potential buyers are still sidelined, waiting for more favorable borrowing conditions. Yun notes that mortgage rate volatility continues to play a central role, often determining week-by-week buyer behavior.
Looking ahead, NAR expects interest rates to gradually decline later this year, which could provide more momentum to the housing market in the second half of 2025.
