Contracts to buy previously owned U.S. homes rebounded by the most on record in May, following two months of declines driven by the coronavirus pandemic shutdown, the National Association of Realtors said on Monday,
The Pending Home Sales Index rose 44.3% to 99.6 in May, the highest month-over-month gain in the index since the association started the survey in January 2001.
Economists polled by Reuters had called for pending home-sale contracts, which become sales after a month or two, to climb 18.9% in May. Low mortgage rates helped spur homebuyers.
Contract signings fell 5.1% in May from the year-earlier month. An index of 100 is equal to the level of contract activity in 2001.
The association said that every major region recorded an increase in month-over-month pending home-sales transactions, while the South also saw a year-over-year increase in pending transactions.
The Northeast index grew 44.4% to 61.5 in May, although it was still down 33.2% from a year ago. In the Midwest, the index rose 37.2% to 98.8 last month, down 1.4% from May 2019.
Pending home sales in the South increased 43.3% to an index of 125.5 in May, up 1.9% from May 2019. The index in the West jumped 56.2% in May to 89.2, down 2.5% from a year ago.
Active listings rose by more than 10% in May compared with April in several metro areas, including urban Honolulu, San Francisco and San Jose, Calif., and Denver.
The association said it expected existing-home sales to reach 4.93 million units in 2020 and new-home sales to hit 690,000.
“This bounceback also speaks to how the housing sector could lead the way for a broader economic recovery," Lawrence Yun, the association's chief economist, said in a statement.
“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% – even after missing the spring buying season due to the pandemic lockdown."