US pending home sales see biggest gain since September 2024

[WASHINGTON] Pending sales of US existing homes had their strongest gain in nearly two years in May, sustaining a slight rally in the beleaguered home resale market.

Contract signings rose 3.8 per cent to 76.8 last month, according to National Association of Realtors (NAR) data released on Wednesday (Jun 17), a faster pace than all estimates in a Bloomberg survey.

The gain marks the fourth straight monthly increase, adding to signs of improvement in the housing market. NAR’s separate existing-home sales report last week showed contract closings sped up to their fastest pace of the year, despite rising borrowing costs. Mortgage rates are hovering at 6.6 per cent, near nine-month highs.

“A late spring buyer rush – even with mortgage rates not budging – is an indication of pent-up housing demand and consumers’ acceptance of above-6 per cent mortgage rates as the new normal,” NAR chief economist Lawrence Yun said in a release. 

Pending sales climbed in all US regions, with the Northeast leading with an 8.7 per cent increase over the month. Yun noted the Northeast is picking up following a period of low inventory and rising home prices.

Because houses typically go under contract a month or two before they’re sold, the data tend to be a leading indicator of closings. BLOOMBERG