According to the National Association of REALTORS® (NAR), pending home sales in the United States decreased by 2.7% in May compared to the previous month. While the Northeast experienced a surge in sales, three other regions recorded monthly losses. Additionally, all four regions saw year-over-year declines in transactions.

The Pending Home Sales Index is a leading indicator of housing activity. It measures housing contract activity and is based on signed real estate contracts for existing single-family homes, condos, and co-ops. When a seller accepts a sales contract on a property, it is recorded into a Multiple Listing Service (MLS) as a “pending home sale.” Most pending home sales become home sale transactions, typically one to two months later.

Other report highlights include:

·       Pending home sales dropped in May, down 2.7% from April.

·       Month over month, contract signings decreased in three U.S. regions but jumped in the Northeast.

·       Pending home sales fell in all four regions compared to one year ago.

Here’s a breakdown by region of pending home sales:

·       Northeast: The PHSI for the Northeast climbed 12.9% from the previous month to reach 66.7. However, this represents a decrease of 21.9% compared to May 2022.

·       Midwest: The Midwest region experienced a drop of 5.3% in the PHSI, which reached 74.4 in May. This figure reflects a decrease of 23.5% from the previous year.

·       South: In the South, the PHSI decreased by 4.4% to 94.4 in May, showing a decline of 19.6% from the prior year.

·       West: The PHSI for the West region lessened by 6.1% in May, reaching 58.4. This represents a significant decrease of 26.6% compared to May 2022.

Despite the sluggish pending contract signings, the housing market remains resilient, with approximately three offers for each listing. However, the lack of housing inventory continues to hinder the realization of full housing demand.

If you’re considering becoming a homeowner this summer, now is the time to get your ducks in a row. Contact one of the experienced professionals at Metrowest today to get started!