The South decreased 4.4%
Washington – Pending home sales shrunk 2.7% in May from the previous month, according to the National Association of Realtors.
The South PHSI decreased 4.4% to 94.4 in May, reducing 19.6% from the prior year. Three U.S. regions posted monthly losses, while sales in the Northeast surged. All four regions saw year-over-year declines in transactions.
“Despite sluggish pending contract signings, the housing market is resilient with approximately three offers for each listing,” said NAR Chief Economist Lawrence Yun, “The lack of housing inventory continues to prevent housing demand from being fully realized.”
The Pending Home Sales Index (PHSI)*, a forward-looking indicator of home sales based on contract signings, dropped 2.7% to 76.5 in May. Year over year, pending transactions fell by 22.2%. An index of 100 is equal to the level of contract activity in 2001.
“It is encouraging that homebuilders have ramped up production, but the supply from new construction takes time and remains insufficient,” added Yun. “There should be more focus on boosting existing-home inventory with temporary tax incentive measures.”
Key Highlights
- 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.
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