Pending home sales eked out a 1.8% monthly gain in May after diving 6.3% in April as wage gains managed to outpace home-price increases, the National Association of REALTORS® said.
All four regions experienced month-over-month gains, led by the West, where pending transactions rose 6%, according to NAR’s Pending Home Sales Index.
“Consistent job gains and rising wages are modestly helping the housing market,” NAR Chief Economist Lawrence Yun said in a press release. “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.”
Year over year, pending sales were up 1.1%.
Pending sales — where a contract has been signed but the transaction hasn’t yet closed — are considered a leading indicator and generally precede existing-home sales by a month or two.
Rising wages and housing inventory are contributing to a “slow thaw” in the market, which has been hampered by high prices and stubborn interest rates, First American Deputy Chief Economist Odeta Kushi said.
“Even this modest increase in pending home sales is a welcome sign for a beleaguered housing market, as the May uptick followed a large dip in April, despite a steady upward trend in mortgage rates,” Kushi said. “The 2025 homebuying season may yet show some signs of life, as purchase-mortgage applications — a separate leading indicator of housing activity — have also registered modest gains in May and June.”
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