The spring real estate market is usually bustling with activity, but 2025 has been a bit more subdued. That said, we just got a flicker of good news with pending home sales rising slightly May.
According to the National Association of REALTORS®, contract signings and pending home sales rose 1.8% from April and were 1.1% higher than a year ago. It’s not a huge jump, but after a 6.3% drop in April, even modest gains are encouraging. This could signal that we’re heading into a more stable season.
What’s Fueling the Movement?
It turns out that consistent job growth and wage increases are playing a role. Lawrence Yun, NAR’s Chief Economist, noted that hourly wages are now rising faster than home prices. While that helps with affordability, mortgage rates still carry the most weight when it comes to buyers’ decisions.
And those rates are holding steady, with the average 30-year fixed mortgage sitting at 6.81% as of mid-June, per Freddie Mac.
Existing Home Sales Are Starting to Climb
This news comes on the heels of another small but hopeful trend existing-home sales crept up 0.8% in May. While that’s not a major surge, it was the first monthly increase in pending home sales since February. It’s another indicator that the market may be finding its footing.
Inventory Makes a Difference
Inventory levels are also shaping the market. Nationally, the number of homes on the market is up 20% from last year. That means more options for buyers and, in some regions, more negotiating power.
In the Northeast, a tight inventory is still pushing prices up. In fact, over a quarter of homes there are selling above list price. Meanwhile, the South is seeing more listings, which has given buyers some breathing room and led to slight price drops. According to Yun, those declines likely won’t last long due to strong job growth in the region.
Regional Market Snapshot
Here’s how each region fared in May:
Northeast:
Pending sales rose 2.1% month-over-month but dipped 0.5% from last year.
Midwest:
A slight 0.3% rise in May from April and a healthy 2.6% increase over last year.
South:
Up 1.0% from April and 2.0% from May 2024.
West:
The biggest mover with a 6.0% jump over April, though still 1.2% below last year’s numbers.
What to Watch Next
If mortgage rates ease later this year as some experts predict, we could see a stronger housing rebound, especially with wage growth and job numbers holding steady.
For now, whether you’re buying, selling, or just keeping an eye on the market, it’s a good time to stay informed. Need help interpreting what this means in your local market? I’m happy to connect you with a trusted real estate agent who can guide you based on your region’s specific trends. Just reach out and I’ll make the introduction.
