Pending home sales rebounded in May, increasing 44.3% compared with April to reach a score of 99.6 on the National Association of Realtors’ (NAR) Pending Home Sales Index (PHSI).
Year over year, contract signings fell 5.1%.
Regionally, and month over month, pending home sales increased 56.2% in the West, 44.4% in the Northeast, 43.3% in the South and 37.2% in the Midwest.
In April, contract signings plummeted about 20% compared with the previous month, due mainly to the onslaught of the coronavirus pandemic.
“This has been a spectacular recovery for contract signings, and goes to show the resiliency of American consumers and their evergreen desire for homeownership,” says Lawrence Yun, chief economist for NAR, in a statement. “This bounce-back also speaks to how the housing sector could lead the way for a broader economic recovery.
“More listings are continuously appearing as the economy reopens, helping with inventory choices,” Yun says. “Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”
Other housing market reports shore-up the idea that a recovery is under way. New home sales and housing starts were both up in May, as well.
“The outlook has significantly improved, as new home sales are expected to be higher this year than last, and annual existing-home sales are now projected to be down by less than 10% – even after missing the spring buying season due to the pandemic lockdown,” Yun says.
NAR now expects existing-home sales to reach 4.93 million units in 2020 and new home sales to hit 690,000.
“All figures light up in 2021, with positive GDP, employment, housing starts and home sales,” Run says.
In 2021, sales are forecast to rise to 5.35 million units for existing homes and 800,000 for new homes.