NAR: May 2023 Pending Home Sales Shrank by 2.7%

According to the National Association of REALTORS, pending home sales fell 2.7% in May compared to the previous month.

Three regions in the United States saw monthly losses, while sales in the Northeast increased. Transactions fell in all four regions year over year.

“Despite sluggish pending contract signings, the housing market is resilient with approximately three offers for each listing,” stated NAR Chief Economist Lawrence Yun.

“The lack of housing inventory continues to prevent housing demand from being fully realized.”

In May, the Pending Home Sales Index (PHSI) fell 2.7% to 76.5, a forward-looking measure of home sales based on contract signings.

Pending transactions decreased by 22.2% year on year. A score of 100 represents the degree of contract activity in 2001.

“It is encouraging that homebuilders have ramped up production, but the supply from new construction takes time and remains insufficient,” Yun continued.

“There should be more focus on boosting existing-home inventory with temporary tax incentive measures.”

Pending Home Sales Regional Breakdown

The Northeast PHSI increased 12.9% from the previous month to 66.7, representing a 21.9% reduction from May 2022.

The Midwest index fell 5.3% to 74.4 in May, down 23.5% from the previous year.

The South PHSI fell 4.4% to 94.4 in May, a 19.6% decline from the previous year.

The West index fell 6.1% in May to 58.4, a decrease of 26.6% from May 2022.