Pending-Home Sales Grow Slightly in May

Home sales appear to be growing slightly. According to a recent report from the National Association of Realtors, pending-home sales increased by 1.8% in May from the prior month and 1.1% year-over-year. All four regions of the U.S. experienced month-over-month increases—with the largest increase observed in the West at 6%. Meanwhile, year-over-year contract signings rose in the Midwest and South but fell in the Northeast and West.

"Consistent job gains and rising wages are modestly helping the housing market," said NAR Chief Economist Lawrence Yun. "Hourly wages are increasing faster than home prices.

However, mortgage rate fluctuations are the primary driver of homebuying decisions and impact housing affordability more than wage gains."

Regarding regional differences, Yun added, "The Northeast's housing shortage is boosting home prices, with more than a quarter of homes selling above list price. Conversely, more inventory in the South gives home buyers greater negotiation power. Price declines in the South should be considered temporary given the region's strong job creation."