The U.S. housing market showed signs of stability when pending home sales exceeded market expectations during May despite ongoing affordability challenges from high mortgage rates.
The National Association of Realtors Pending Home Sales Index increased 1.8% to 72.6 during May according to their latest report which exceeded market predictions of a 0.1% increase. The market showed positive growth throughout all four regions of the country.
The contract signing numbers from last year to this year increased by 1.1% which indicates a small increase in housing market demand. The housing market faces ongoing affordability issues because homebuyers must deal with ongoing mortgage rate instability.
The main obstacle to home sales remains mortgage rates according to NAR Chief Economist Lawrence Yun despite steady employment growth and increasing salaries.
Home sales have faced their biggest challenge since early 2023 because of rising financing costs even though income growth has slightly enhanced purchasing power. The unstable nature of mortgage rates creates difficulties for potential homebuyers who want to make purchasing decisions.
The recent increase in pending home sales brings optimism to the market but experts maintain a cautious stance because of potential interest rate stability in the upcoming second half of the year.
