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Mortgage rates may still be higher than anyone wants, but new numbers from the National Association of Realtors show that strong job and wage growth helped push pending home sales higher in May.
The numbers, out Thursday, show that pending sales rose 1.1 percent year over year last month. Compared to April, pending sales rose 1.8 percent. The increases are small, but NAR framed them as a positive sign anyway and attributed them to other positive economic progress.
“Consistent job gains and rising wages are modestly helping the housing market,” NAR Chief Economist Lawrence Yun said in a statement. “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.”
NAR’s pending home sales report is considered a leading indicator for the housing market at large. It tracks pending sales of existing homes. NAR reported that all four regions that it tracks experienced increases in pending home sales in May, according to the new data.
The uptick also coincided with a string of signs that home prices were declining in some regions while booming elsewhere.
The Federal Housing Finance Agency reported this week that home prices fell 0.4 percent from March to April in the U.S., with price declines more pronounced in some regions and gains more pronounced in others.
Pending sales were down 0.5 percent in the Northeast compared to May 2024. Still, they were up 2.1 percent compared to April 2025.
The FHFA report found that home prices in New England were 5.5 percent higher in April 2025 than a year earlier. Home prices were up 7.4 percent this year in the Middle Atlantic, which includes New York, Pennsylvania and Delaware.
“The Northeast’s housing shortage is boosting home prices, with more than a quarter of homes selling above list price,” Yun said. “Conversely, more inventory in the South gives homebuyers greater negotiation power. Price declines in the South should be considered temporary given the region’s strong job creation.”
Pending home sales rose 6 percent in the West compared to a month earlier, NAR said, the strongest growth among the four regions.
NAR’s pending sales report stood in stark contrast to a separate report, also released this week, which found that sales of newly constructed single-family homes dropped 13.7 percent in May 2025 from the previous month.
The seasonally adjusted annual rate of sales hit 623,000 in May, which was 6.3 percent below the May 2024 rate of 665,000, the Census Bureau and Department of Housing and Urban Development reported on Wednesday.
