A lot of buyers spent two years waiting for mortgage rates to drop before buying a house. They finally gave up.
Pending home sales - the count of signed contracts not yet closed - jumped 3.8% in May, the NAR said. That's the biggest monthly gain since September 2024 and the fourth straight month of gains.
The market is finally moving, not because rates fell, but because buyers stopped waiting.
Pending contracts are an early read on closings, since deals usually wrap in a month or two. May's number suggests a real pickup is coming in the June and July existing-home sales data.
Every region was positive, both versus April and versus a year ago:
Average 30-year mortgage rates have held above 6% all year, with little sign of falling much further.
Builders are noticing too, with mortgage applications and homebuilder confidence both ticking up alongside the contract data.
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NAR Chief Economist Lawrence Yun called it a "late spring buyer rush." His read: above-6% mortgage rates are now "the new normal," and buyers stopped holding out for sub-5% loans that aren't coming back any time soon.
His rate forecast was mixed. Lower oil prices should pull mortgage rates down a touch, but heavy federal borrowing and big AI investment by tech companies are keeping pressure on Treasury yields - the interest rate bonds pay - which feeds into mortgage rates.
Tech-driven yield pressure isn't trivial. Tech companies are issuing tens of billions in bonds for AI buildouts, and that demand competes with Treasury borrowing for the same investor capital.
Translation: a 5% mortgage isn't coming back fast.
Metro-level data shows where the real heat is.
Kansas City led with a 20.1% year-over-year jump in pending sales. San Antonio came next at 15.7%, followed by Minneapolis at 13.9% and Miami at 11.4%.
Affordable Midwest and Sun Belt cities are pulling buyers off the sidelines, while more expensive coastal markets remain quieter relative to last spring.
Existing-home sales for May will be the next read on whether this contract activity actually translates into closings.
The buyers who hesitated got nothing for it, and the ones moving now are setting the floor for the rest of the year.
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