Pending home sales mounted a record comeback in May, seeing encouraging contract activity after two previous months of declines brought on by the coronavirus pandemic, according to the National Association of Realtors®. Every major region recorded an increase in month-over-month pending home sales transactions, while the South also experienced a year-over-year increase in pending transactions.
The Pending Home Sales Index (PHSI),* www.nar.realtor/pending-home-sales, a forward-looking indicator of home sales based on contract signings, rose 44.3% to 99.6 in May, chronicling the highest month-over-month gain in the index since NAR started this series in January 2001. Year-over-year, contract signings fell 5.1%. An index of 100 is equal to the level of contract activity in 2001.
The Northeast PHSI grew 44.4% to 61.5 in May, although it was still down 33.2% from a year ago. In the Midwest, the index rose 37.2% to 98.8 last month, down 1.4% from May 2019.
Pending home sales in the South increased 43.3% to an index of 125.5 in May, up 1.9% from May 2019. The index in the West jumped 56.2% in May to 89.2, down 2.5% from a year ago.
This was well above expectations for this index. Note: Contract signings usually lead sales by about 45 to 60 days, so this would usually be for closed sales in June and July.