Kevin Sears President | Official website
Pending home sales in the United States rose by 1.8% in May compared to the previous month and saw a year-over-year increase of 1.1%, as reported by the National Association of REALTORS (NAR). All four U.S. regions experienced month-over-month growth, with the West showing the most significant increase. However, on an annual basis, contract signings increased in the Midwest and South but decreased in the Northeast and West.
"Consistent job gains and rising wages are modestly helping the housing market," said NAR Chief Economist Lawrence Yun. He noted that "hourly wages are increasing faster than home prices," but emphasized that "mortgage rate fluctuations are the primary driver of homebuying decisions and impact housing affordability more than wage gains."
Discussing regional differences, Yun explained, "The Northeast's housing shortage is boosting home prices, with more than a quarter of homes selling above list price." In contrast, he mentioned that "more inventory in the South gives home buyers greater negotiation power," adding that "price declines in the South should be considered temporary given the region's strong job creation."
The report highlights various regional performances for May 2025: The Northeast saw a 2.1% month-over-month increase but experienced a 0.5% decrease year-over-year; The Midwest had a 0.3% monthly rise and a 2.6% yearly gain; The South observed a 1.0% monthly uptick along with a 2.0% annual increase; The West recorded a notable 6.0% monthly jump despite experiencing a 1.2% decline year-over-year.
The changes in pending home sales are measured using the Pending Home Sales Index (PHSI), which serves as an indicator based on contract signings for existing homes.
