The latest analysis from the National Association of Realtors showed a surprising development for the month of May: Pending home sales actually rose, breaking a six-month streak of steady declines.
The increase was a slight one, up just 0.7% over April and still 13.6% lower than May of last year, demonstrating the challenges the housing market nationwide continues to face, but it still shocked analysts, who had forecast another 4% dip.
One possible reason for the slight rise may be relief in mortgage rates, which have been on the rise since January but saw, again, a slight decline in May. The month also saw an increase in available homes, with new properties joining existing languishing ones and giving potential buyers more options.
However, the rollercoaster may turn downward again in the near future. After the interest rate on a 30-year fixed mortgage fell from a historic high of 5.64% at the beginning if May to 5.25% as the calendar flipped, it rebounded and rose past the 6% mark by mid-June.
“Despite the small gain in pending sales from the prior month, the housing market is clearly undergoing a transition,” Lawrence Yun, chief economist for the Realtors, told CNBC. “Contract signings are down sizably from a year ago because of much higher mortgage rates.”