U.S. pending sales of existing homes posted their strongest gains in nearly two years in May, sustaining a mild rally in the beleaguered home resale market.
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The number of contract signers rose 3.8% to 76.8 last month, according to National Association of Realtors data released Wednesday, a faster pace than all estimates in a Bloomberg survey.
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The gain marks the fourth straight monthly increase, adding to signs of improvement in the housing market. NAR’s separate existing home sales report last week showed contract closings reached the fastest pace of the year, despite rising financing costs. Mortgage interest rates are hovering around 6.6%, almost the highest level in nine months.
“A buying rush in late spring — even if mortgage rates have not yet risen — is indicative of pent-up demand for housing and consumers’ acceptance of mortgage rates above 6% as the new normal,” NAR chief economist Lawrence Yun said in a news release.
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Pending sales rose in all US regions, with the Northeast leading the way with an increase of 8.7% for the month. Yun noted that the Northeast is picking up after a period of low inventories and rising home prices.
Because homes typically go under contract a month or two before they are sold, the data is often a leading indicator of closings.