NAR reported more buyers signed residential contracts, but activity remained low compared to recent years.
Man and woman signing home sale contract close up
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The weather is warming up, and the housing market may be, too, following a slow start to what’s typically peak homebuying season.

Pending home sales—a forward-looking indicator of home sales based on contract signings—experienced a subtle increase of 1.8% in May compared to April and were up 1.1% from a year ago, the National Association of REALTORS® reported Thursday. This slight rise may point to the market becoming less volatile following a 6.3% decrease in contract signings in April and 6.1% increase in March.

“Consistent job gains and rising wages are modestly helping the housing market,” says NAR Chief Economist Lawrence Yun. “Hourly wages are increasing faster than home prices. However, mortgage rate fluctuations are the primary driver of homebuying decisions and impact housing affordability more than wage gains.”

The latest uptick in sales contracts follows another mildly encouraging sign for the housing market: Existing-home sales inched up 0.8% in May. While the gain was modest for the typically active spring selling season, it marked the first month-over-month increase since February for completed, existing-home sales, NAR’s research shows.

Yun notes that if mortgage rates decrease in the second half of the year, he expects home sales nationwide to rise even more, given strong income growth and a record-high number of jobs.

The average 30-year-fixed rate was 6.77% for the week ending June 26, according to Freddie Mac. 

Regional Snapshot

Aside from mortgage rates, inventory—which is up 20% nationally from a year ago—is also affecting contracts.  

“The Northeast’s housing shortage is boosting home prices, with more than a quarter of homes selling above list price,” Yun says. “Conversely, more inventory in the South gives home buyers greater negotiation power. Price declines in the South should be considered temporary given the region’s strong job creation.”

According to NAR’s Pending Homes Sales Index, May saw a boost in housing transactions across all U.S. regions, with potential buyers in the West seeing the biggest percent jump:

  • Northeast: Pending home sales rose 2.1% in May compared to the prior month but dipped 0.5% relative to last year.
  • Midwest: The middle of the country saw a 0.3% uptick in contract signings month-over-month and a 2.6% gain year-over-year.
  • South: Buyers signed 1.0% more contracts in May relative to April and 2.0% more versus 2024.
  • West: Pending home sales climbed 6.0% over last month’s estimates but fell about 1.2% short of last year’s.