Housing News

Home Sales Set to Increase as Homebuyer Demand Picks Up

Pending home sales increased 3.8% in May compared to April, according to the latest National Association of Realtors (NAR) data. The number of homes under contract was up 4.8% in May compared to a year ago.

Pending home sales are homes that are under contract but have not yet closed. The NAR data includes existing homes and excludes new construction.

This data is considered a leading indicator of home sales. An increase in pending sales will likely lead to an increase in completed sales.

“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 Lawrence Yun in a statement.

Mortgage rates averaged 6.52% for 30-year, fixed-rate loans in the week ending June 11, according to Freddie Mac data. NAR expects mortgage rates to average 6.5% in 2026, according to a forecast Yun shared during the group’s Legislative Meetings this week.

Where did the most homes go under contract in May?

All four regions of the country posted gains in pending home sales both monthly and annually.

The Midwest posted the largest annual increase, with pending sales rising 9.3% year-over-year, according to NAR. The Northeast followed at 6.1%.

Pending sales ticked up 3.3% year-over-year in the South, while there was a 1.2% uptick in the West.

At the local level, several markets posted notable year-over-year gains in pending home sales.

The Kansas City metropolitan area posted the largest increase in homes going under contract in May compared to a year. Pending sales were up 20.1% year-over-year.

(NAR only includes the nation’s 50 largest metropolitan areas. Metros include the main city and surrounding towns, suburbs, and smaller urban areas.)

It was followed by the San Antonio metro area, where pending sales rose 15.7%; Minneapolis, up 13.9%; Miami, up 11.4%; and Louisville, Ky., up 11.2%.

Bright MLS Chief Economist Lisa Sturtevant said the report points to continued buyer demand, although affordability remains a challenge for many households. (The multiple listing service covers the mid-Atlantic region.)

“Pending home sales activity was still relatively strong in May,” Sturtevant said in a statement. “Despite today’s report and the obvious pent-up demand, there are still headwinds in the housing market.”

What should homebuyers expect this summer?

Affordability pressures continue to weigh on many would-be buyers. The median U.S. home sale price reached a record high of $429,300 for existing homes in the month of May, according to NAR.

Zillow recently reported that the typical starter home now costs $1 million or more in nearly 250 cities nationwide.

Sturtevant said economic uncertainty and inflation continue to sideline some first-time and moderate-income buyers, while higher-income households remain more active in the market. She also noted that the growth in the number of homes going up for sale has begun slowing in some markets.

“Going forward, falling oil prices will help lower mortgage rates,” said NAR’s Yun. “But declines will be modest given sizable borrowing by the federal government and strong AI investment spending by tech companies.”

Looking ahead, NAR is forecasting that existing home sales will rise 4% in 2026 as more homes come onto the market. Yun said sales activity should improve during the second half of the year if the number of homes on the market continues to increase.