(Kitco News) - Hopes for a stabilizing U.S. housing market were bolstered after the number of potential home buyers rose beyond expectations last month, according to the latest data from the National Association of Realtors (NAR).
The U.S. pending home sales index rose 3.8% in May, the NAR announced on Wednesday. The data was better than forecasts, as economists expected only a 0.8% rise. April’s print was also revised down to 0.3% from 1.4%.
For the year, pending home sales rose 4.8% against expectations for a 3.0% increase and following the unrevised 3.2% increase in April. Month-over-month and year-over-year pending home sales rose in the Northeast, Midwest, South and West..
“A late spring buyer rush—even with mortgage rates not budging—is an indication of pent-up housing demand and consumers’ acceptance of above-6% mortgage rates as the new normal,” said NAR Chief Economist Dr. Lawrence Yun. “The inventory-constrained Northeast region, which has seen faster home price growth but slower home sales for several months, is now showing more buyer contract signings. More supply is needed to help moderate home price growth.”
“Going forward, falling oil prices will help lower mortgage rates,” Yun said. “But declines will be modest given sizable borrowing by the federal government and strong AI investment spending by tech companies.”
Spot gold rose closer to its session high of $4,349.60 in the minutes following the housing data. It last traded at $4,344.08 per ounce for a gain of 0.34% on the day.
Economists pay close attention to pending home sales because the report is a leading indicator of existing home sales, given that contracts are signed a few months before homes are actually sold.
The U.S. housing market has been trying to stabilize after seeing significant weakness over the past two years, as many potential home buyers were priced out of the market due to rising prices and high mortgage rates.
