US Pending Home Sales (M/M) May: 8.0% (est -1.0%; prev -4.4%) - Pending home sales (contracts signed) - jump in May boding well for summer sales - details

 US Pending Home Sales (M/M) May: 8.0% (est -1.0%; prev -4.4%)

- Pending Home Sales NSA (Y/Y) May: 13.9% (prev R 53.7%)



May pending home sales pending home sales (which are contract signings not actual transactions so a little more forward looking) deviated from the other May housing reports with a big increase m/m.  Again, as this is contract signings, this bodes well for sales in June and July.  All regions saw m/m increases.  Here is some commentary from the report.

"May's strong increase in transactions – following April's decline, as well as a sudden erosion in home affordability – was indeed a surprise," said Lawrence Yun, NAR's chief economist. "The housing market is attracting buyers due to the decline in mortgage rates, which fell below 3%, and from an uptick in listings."

Although there has been a series of obstacles over the last year, including an unprecedented pandemic, record-high prices and all-time low inventory, buyers are still lining up at a feverish pace, according to Yun.

"While these hurdles have contributed to pricing out some would-be buyers, the record-high aggregate wealth in the country from the elevated stock market and rising home prices are evidently providing funds for home purchases,” Yun said. "More market listings will appear in the second half of 2021, in part from the winding down of the federal mortgage forbearance program and from more home building.

"Home price growth will steadily moderate with increased supply, but a broad and prolonged decline in prices is unlikely," Yun continued. "However, if a reduction occurs in some markets, homebuyers will view the lower home price as a second-chance opportunity to get into the market after being outbid in previous multiple-bid market conditions."

In terms of regions, 

The Northeast PHSI increased 15.5% to 98.5 in May, a 54.6% climb from a year ago. In the Midwest, the index grew 6.7% to 107.7 last month, up 7.8% from May 2020.

Pending home sales transactions in the South rose 4.9% to an index of 135.5 in May, up 6.1% from May 2020. The index in the West increased 10.9% in May to 102.0, up 12.5% from a year prior.

To see more content, including summaries of some of major economic reports and my morning and nightly summaries go to https://sethiassociates.blogspot.com


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