Pending Home Sales Rose 44.3% in May
Washington, DC, June 29, 2020-The Pending Home Sales Index (PHSI) rose 44.3% to 99.6 in May, chronicling the highest month-over-month gain in the index since NAR started this series in January 2001, according to the National Association of Realtors. Year-over-year, contract signings fell 5.1%. An index of 100 is equal to the level of contract activity in 2001.
“This has been a spectacular recovery for contract signings, and goes to show the resiliency of American consumers and their evergreen desire for homeownership,” said Lawrence Yun, NAR’s chief economist. “This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”
“More listings are continuously appearing as the economy reopens, helping with inventory choices,” Yun said. “Still, more home construction is needed to counter the persistent underproduction of homes over the past decade.”
According to data from realtor.com, among the largest metro areas, active listings were up by more than 10% in May compared to April in several metro areas, including Urban Honolulu, Hawaii; San Francisco, California; San Jose, California; Denver, Colorado; and Colorado Springs, Colorado.
“The outlook has significantly improved, as new home sales are expected to be higher this year than last, and annual existing-home sales are now projected to be down by less than 10% – even after missing the spring buying season due to the pandemic lockdown,” Yun said.
NAR now expects existing-home sales to reach 4.93 million units in 2020 and new home sales to hit 690,000. “All figures light up in 2021 with positive GDP, employment, housing starts and home sales.” Yun noted that in 2021, sales are forecast to rise to 5.35 million units for existing homes and 800,000 for new homes.