Data released on Monday showed a larger than expected gain in US Pending Home Sales in May, rising 44.3% compared to April. Analysts at Wells Fargo point out sales are down 5.1% from a year earlier. They see the surge in sales is the latest evidence that the housing market is fully on the path to recovery.
“The Pending Home Sales Index is based on signed contracts for single family as well as condo sales and leads existing sales by 30 to 45 days. In other words, we are likely to see a similar bounce in existing sales (closed contracts) in coming months.”
“Pending sales are still down 5.1% over the year and almost 11% from February’s peak. That said, the steady rise in purchase mortgage applications also points to more improvement ahead.”
The above-consensus gain indicates that many sales were likely delayed, as opposed to canceled, as a result of the lockdowns.”