Pending Home Sales See Surprise Rebound In May, But Experts Warn Housing Market Is ‘Undergoing A Transition’
Pending home sales, which measure signed contracts on previously owned and existing properties, unexpectedly rose slightly in May, up 0.7% compared to April and surprising analysts who were largely expecting a drop of up to 4%.
Home sales were strongest in the Northeast (up roughly 15%), while other regions like the Midwest and West both saw declines of 1.7% and 5%, respectively.
Pending home sales were still nearly 14% lower than they were a year ago—with year-over-year declines in all major regions as buyers have had to contend with rising mortgage rates in 2022.
The average interest rate on the popular 30-year fixed mortgage home loan now sits at nearly 6%, not far off from its highest levels since the 2008 financial crisis.
Though mortgage rates have been shooting up this year, they moderated somewhat in May, which helps explain the surprise increase in pending home sales: The average rate on a 30-year fixed mortgage rose as high as 5.6% in early May before closing out the month at 5.25%, according to Mortgage News Daily.