May data shows buyers returned despite high mortgage rates, signaling resilience in the housing market.
Pending home sales in the US increased 4.8% year-over-year in May, marking a rebound as buyers overcame concerns about elevated mortgage rates and inflation. The National Association of Realtors’ index also climbed 3.8% month-over-month, with all regions posting gains, led by a 9.3% surge in the Midwest.
The rise follows a 3.2% increase in May home sales and defies earlier expectations that inflation and geopolitical tensions would dampen activity. Mortgage rates held steady around 6.4%-6.5% during the period, yet demand remained strong, suggesting buyers have adjusted to higher borrowing costs.
Economists noted the late spring surge reflects pent-up demand and acceptance of above-6% mortgage rates as the new norm. Pending sales typically precede final transactions by one to two months, offering an early signal for future market activity.