Pending Home Sales Rise 1.8% in May

Washington, DC, June 27, 2025-Pending home sales increased 1.8% in May, according to the National Association of Realtors. All four U.S. regions experienced month-over-month increases in transactions. Year-over-year, contract signings rose in the Midwest and South but descended in the Northeast and West, with the West suffering the greatest loss.

The Pending Home Sales Index (PHSI) increased to 72.6 in May. Year-over-year, pending transactions rose by 1.1%. An index of 100 is equal to the level of contract activity in 2001.

"Consistent job gains and rising wages are modestly helping the housing market," said 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 Northeast PHSI increases 2.1% from last month to 63.4, down 0.5% from May 2024. The Midwest index rose 0.3% to 73.7 in May, up 2.6% from the previous year.

The South PHSI increased 1% to 86.7 in May, up 2.0% from a year ago. The West index rose 6% from the prior month to 53.3, down 1.2% from May 2024.

"Consistent job gains and rising wages are modestly helping the housing market," added 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."