May Pending Home Sales Jump 8%

Pending home sales rose strongly to the highest reading for May since 2005, the National Association of Realtors reported Wednesday.

The Pending Home Sales Index (, a forward-looking indicator of home sales based on contract signings, rose 8% to 114.7 in May. Year-over-year, signings increased by 13.1%.

Every region saw both month-over-month and year-over-year gains in May. In the Northeast, the index increased by 15.5% to 98.5 and jumped by 54.6% from a year ago. In the Midwest, the index grew by 6.7% to 107.7 and by 7.8% from a year ago.

Pending sales in the South rose by 4.9% to 135.5 in May and improved by 6.1% from a year ago. The index in the West increased by 10.9% in May to 102.0 and improved by 12.5% from a year ago.

“May’s strong increase in transactions – following April’s decline, as well as a sudden erosion in home affordability – was indeed a surprise,” said NAR Chief Economist Lawrence Yun. “The housing market is attracting buyers due to the decline in mortgage rates, which fell below 3%, and from an uptick in listings.”

Yun said despite a series of obstacles over the past year, including an unprecedented pandemic, record-high prices and record-low inventory, “buyers are still lining up at a feverish pace.”

“While these hurdles have contributed to pricing out some would-be buyers, the record-high aggregate wealth in the country from the elevated stock market and rising home prices are evidently providing funds for home purchases,” Yun said. “More market listings will appear in the second half of 2021, in part from the winding down of the federal mortgage forbearance program and from more home building.