NAR Pending Home Sales Report Reveals 1.8% Increase in May
Pending home sales increased in the Midwest and South but decreased in the Northeast and West
MARKET CONDITIONSPENDING HOME SALES
NAR Pending Home Sales Report Reveals 1.8% Increase in May
National Association of REALTORS®, article by Lauren Cozzi | June 26, 2025
Month-Over-Month
1.8% increase in pending home sales
All four U.S. regions experienced increases
Year-Over-Year
1.1% increase in pending home sales
Pending home sales increased in the Midwest and South but decreased in the Northeast and West
WASHINGTON (June 26, 2025) – Pending home sales increased by 1.8% in May from the prior month and 1.1% year-over-year, according to the National Association of REALTORS® Pending Home Sales report. All four U.S. regions experienced month-over-month increases – most notably the West. Year-over-year, contract signings rose in the Midwest and South, while they fell in the Northeast and West. This report equips real estate professionals who are REALTORS® with valuable information that helps them serve their clients and get to their next transaction.
"Consistent job gains and rising wages are modestly helping the housing market," said NAR Chief Economist Lawrence Yun. "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."
Regarding regional differences, Yun added, "The Northeast's housing shortage is boosting home prices, with more than a quarter of homes selling above list price. Conversely, more inventory in the South gives home buyers greater negotiation power. Price declines in the South should be considered temporary given the region's strong job creation."
May 2025 National Snapshot
May 2025 Pending Home Sales
1.1% year-over-year increase
May 2025 Regional Snapshot
Northeast
2.1% month-over-month increase
0.5% year-over-year decrease
Midwest
0.3% month-over-month increase
2.6% year-over-year increase
South
1.0% month-over-month increase
2.0% year-over-year increase
West
6.0% month-over-month increase
1.2% year-over-year decrease
The percent of change in pending home sales is based on the Pending Home Sales Index (PHSI)* – a forward-looking indicator of home sales based on home-contract signings. An index of 100 is equal to the level of contract activity in 2001.
About the National Association of REALTORS®
The National Association of REALTORS® is involved in all aspects of residential and commercial real estate. The term REALTOR® is a registered collective membership mark that identifies a real estate professional who is a member of the National Association of REALTORS® and subscribes to its strict Code of Ethics.
*The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
Pending contracts are good early indicators of upcoming sales closings. However, the amount of time between pending contracts and completed sales is not identical for all home sales. Variations in the length of the process from pending contract to closed sale can be caused by issues such as buyer difficulties with obtaining mortgage financing, home inspection problems, or appraisal issues.
The index is based on a sample that covers about 40% of multiple listing service data each month. In developing the model for the index, it was demonstrated that the level of monthly sales-contract activity parallels the level of closed existing-home sales in the following two months.