The Nation Association of Realtors recently released their Pending Home Sales report, and it showed that signed contracts on existing single-family homes, condos and co-ops increased by 8% for the month of May, which was well above the 1% decline that was expected. This was the highest May reading since 2005. Year over year pending sales increased by 13.1%. In the Northeast, pending sales increased by 15.5% for the month and a whopping 54.6% from a year ago. The Midwest index increased by 6.7% for the month and by 7.8% year over year. This is all in the face of very tight, record low inventory levels.
“May’s strong increase in transactions – following April’s decline, as well as a sudden erosion in home affordability – was indeed a surprise,” said Lawrence Yun, NAR Chief Economist. Also, according to Yun, there has been a series of obstacles over the last year, including an unprecedented pandemic, record-high prices and all-time low inventory, despite all of those factors, buyers are still lining up at a feverish pace. Yun sees inventory picking back up by year end due to the winding down of federal mortgage forbearance programs and increased new home building. He also added, “Home price growth will steadily moderate with increased supply, but a broad and prolonged decline in prices is unlikely.”