Pending sales of US existing homes had their strongest gain in nearly two years in May, sustaining a slight rally in the beleaguered home resale market.
Contract signings 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 sped up to their fastest pace of the year, in spite of rising borrowing costs. Mortgage rates are hovering at 6.6%, near nine-month highs.
"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," NAR Chief Economist Lawrence Yun said in a release.
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Pending sales climbed in all US regions, with the Northeast leading with an 8.7% increase over the month. Yun noted the Northeast is picking up following a period of low inventory and rising home prices.
Because houses typically go under contract a month or two before they're sold, the data tend to be a leading indicator of closings.
