Pending home sales rise in May across all U.S. regions

Pending home sales increased in May, posting gains from both the previous month and a year earlier as contract activity strengthened across all four major U.S. regions, according to data released Wednesday by the National Association of Realtors (NAR).

The Pending Home Sales Index — tracking signed contracts on existing homes — rose 3.8% from April and was up 4.8% compared with May 2025.

The Northeast and Midwest recorded the strongest monthly gains, while the South and West also posted increases. Year-over-year, pending sales rose in every region.

NAR Chief Economist Lawrence Yun said the increase reflects sustained buyer demand despite elevated borrowing costs.

“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% mortgage rates as the new normal,” said Yun. “The inventory-constrained Northeast region, which has seen faster home price growth but slower home sales for several months, is now showing more buyer contract signings. More supply is needed to help moderate home price growth.”

He added that mortgage rates could ease modestly in the coming months but expects broader economic factors to limit significant declines.

“Going forward, falling oil prices will help lower mortgage rates,” Yun said. “But declines will be modest given sizable borrowing by the federal government and strong AI investment spending by tech companies.”

First American Deputy Chief Economist Odeta Kushi agreed that the uptick in pending home amid interest rate increases in particularly impressive.

“Mortgage rates increased between March and May, reversing some of the affordability gains that emerged earlier in the year,” she said. “Under normal circumstances, higher financing costs would be expected to dampen buyer demand. Instead, many households appear willing to move forward with purchases as inventory improves and the reality of higher-for-longer mortgage rates becomes more widely accepted.”

Regional performance

Compared with April, pending home sales increased:

• Northeast: 8.7%
• Midwest: 8.1%
• South: 1.0%
• West: 0.7%

Compared with May 2025, pending sales increased:

• Northeast: 6.1%
• Midwest: 9.3%
• South: 3.3%
• West: 1.2%

Despite new gains, Kushi cited that activity remains low relative to historical norms — while elevated mortgage rates and the lock-in effect continue to constrain market activity.

“Nevertheless, improving inventory, modestly better affordability and persistent pent-up demand are providing enough support to keep buyer demand moving in a positive direction, even in the face of higher borrowing costs,” she said.

Metro areas with the largest annual gains

Among the nation’s 50 largest metropolitan areas, Realtor.com Economics reported the biggest year-over-year increases in pending home sales were:

1. Kansas City, Missouri-Kansas (+20.1%)
2. San Antonio-New Braunfels, Texas (+15.7%)
3. Minneapolis-St. Paul-Bloomington, Minnesota-Wisconsin (+13.9%)
4. Miami-Fort Lauderdale-West Palm Beach, Florida (+11.4%)
5. Louisville/Jefferson County, Kentucky-Indiana (+11.2%)
6. Cincinnati, Ohio-Kentucky-Indiana (+10.1%)
7. Nashville-Davidson-Murfreesboro-Franklin, Tennessee (+9.4%)
8. Milwaukee-Waukesha, Wisconsin (+8.7%)
9. Virginia Beach-Chesapeake-Norfolk, Virginia-North Carolina (+8.2%)
10. Richmond, Virginia (+8.2%)

This article was written by Jonathan Delozier and generated with the assistance of HousingWire Automation. It was reviewed by a HousingWire editor before publication.