The Pending Home Sales Index, an advance look at home sales based on signed purchase and sale agreements, fell 5.1 percent in May compared to the same month last year.
When compared to April of 2020, the news was much better. Pending sales increased by 44.3 percent last month after two consecutive months of decline, NAR reported.
“The outlook has significantly improved, as new home sales are expected to be higher this year than last, and annual existing home sales are now projected to be down by less than 10 percent even after missing the spring buying season due to the pandemic lockdown,” said Lawrence Yun, NAR’s chief economist, in a statement.
Three regions of the country saw pending home sales drop in May compared to one year ago, according to the data. The Northeast was down 33.2 percent last month compared to May 2019. The Midwest slipped 1.4 percent from last year. Pending sales were down 2.5 percent in the West from a year ago.
The one exception was the South where pending sales rose by 1.9 percent from May 2019.
But compared to April, all four of the nation’s regions saw home purchase agreements increase in May, the data showed. The Northeast grew 44.4 percent, the Midwest rose 37.2 percent, the South increased 43.3 percent and the West jumped 56.2 percent.
“This has been a spectacular recovery for contract signings and goes to show the resiliency of American consumers and their evergreen desire for homeownership,” Yun said in the statement. “This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery.”
Listings are on the rise as the economy reopens, helping with inventory choices, Yun added.
According to the data, the largest metropolitan areas where listings were up by more than 10 percent in May compared to April included Honolulu, Hawaii; San Francisco and San Jose, California; and Denver and Colorado Springs, Colorado.
Last month, PYMNTS reported existing home sales fell in May as the pandemic has made homebuying more challenging, according to NAR.
In a PYMNTS interview last month, HomeLight CEO Drew Uher said a survey of agents by the San Francisco real estate referral company in April found 58 percent of sellers and 51 percent of buyers will delay real estate plans for at least several months.