The National Association of Realtors said pending home sales rose 1.1% in May, easily beating the forecast. Three of the four major regions posted growth, while the West saw a slight decline.
|Indicators||Prior||Consensus Forecast||Forecast Range||Result|
|PHSI – M/M ∆||-1.5 %||0.6 %||-0.1 % to 1.1 %||1.1 %|
|PHSI – Level||104.3||105.4|
The Pending Home Sales Index — which is a forward-looking indicator based on contract signings — rose to 105.4 in May, up from 104.3 in April. Year-over-year contract signings ticked down 0.7%, marking the 17th straight month of annual decreases.
“Rates of 4% and, in some cases even lower, create extremely attractive conditions for consumers,” Lawrence Yun, NAR chief economist said. “Buyers, for good reason, are anxious to purchase and lock in at these rates.”
Mr. Yun said consumer confidence for home-buying has gained, and forecasted more activity in the coming months. He added the year-over-year increases could be a sign of a rise in inventory.
“The Federal Reserve may cut interest rates one more time this year, but there is no guarantee mortgage rates will fall from these already historically low points,” he said. “Job creation and a rise in inventory will nonetheless drive more buyers to enter the market.”
Regional Breakdown for PHSI
The PHSI in the Northeast increased 3.5% to 92.0 and is now just 0.5% below a year ago. In the Midwest, the index rose 3.6% to 100.3, and is 1.2% lower than May 2018.
Pending home sales in the South ticked up 0.1% to 124.1 in May, which is 0.7% higher than last May. The index in the West fell 1.8% in May to 91.8 and is down 3.1% year-over-year.