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Economy in Brief

U.S. Pending Home Sales Rebound in May
by Sandy Batten  June 30, 2021

• Rise in May more than offsets decline in April with gains in each region.

• Purchases remain constrained by limited supply and rapidly rising prices.

Pending home sales rebounded in May, rising 8.0% m/m (+13.1% y/y) following a 4.4% decline in April. The May level of the index was the highest since January though buyers are still being constrained by rising prices and a near-record low supply of homes for sale.

Sales in the Northeast rose 15.5% m/m (+54.6% y/y) in May, their largest monthly increase since July 2020 and more than reversing their 12.9% m/m decline in April. Sales in the Midwest rose for the second consecutive month following five straight monthly declines. They were up 6.7% m/m (+7.8% y/y) in May on top of a 3.3% m/m rise in April. Sales in the South increased 4.9% m/m (+6.1%) in May, not quite reversing their 5.9% m/m decline in April. Sales in the West jumped 10.9% m/m (+12.5% y/y) in May, their largest monthly gain since August 2020, versus a 2.6% m/m decline in April.

The pending home sales index measures sales at the time the contract for the purchase of an existing home is signed, analogous to the Census Bureau's new home sales data. In contrast, the National Association of Realtors' existing home sales data are recorded when the sale is closed, which is likely a couple of months after the sales contract has been signed. In developing the pending home sales index, the NAR found that the level of monthly sales contract activity leads the level of closed existing home sales by about two months.

The series dates back to 2001 and are available in Haver's PREALTOR database. Weekly mortgage interest rates from the Mortgage Bankers Association can be found in the SURVEYW database.

Pending Home Sales (SA, % chg) May Apr Mar May Y/Y % 2020 2019 2018
Total 8.0 -4.4 1.7 13.1 6.9 1.0 -4.1
   Northeast 15.5 -12.9 6.1 54.6 2.5 0.7 -5.2
   Midwest 6.7 3.3 -4.6 7.8 7.7 -0.3 -4.6
   South 4.9 -5.9 3.0 6.1 8.5 1.8 -1.8
   West 10.9 -2.6 2.9 12.5 5.9 1.1 -7.3
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