The National Association of Realtors (NAR) reported This Week in Real Estate a 1.8% month-over-month increase in its Pending Home Sales Index for May, reflecting a 1.1% gain compared to the same period last year. All four U.S. regions experienced monthly growth, with the Midwest and South also showing year-over-year improvements. Fannie Mae has revised its 2025 forecast for existing single-family home sales to 4.14 million units, a slight downward adjustment from the previous estimate of 4.24 million units. This revision is attributed in part to elevated expectations for mortgage rates, which are now projected to conclude 2025 and 2026 at 6.5% and 6.1%, respectively. Mortgage rates declined for the fourth consecutive week, reaching their lowest level since early May. According to Freddie Mac, the average rate for a 30-year fixed mortgage fell to 6.77%, down from 6.81% the previous week. In contrast, the U.S. Commerce Department reported a significant decline in new single-family home sales, which dropped 13.7% in May from April to a seasonally adjusted annual rate of 623,000 units. This figure represents a 6.3% decrease compared to May 2024. Below are key events from the fourth week of June impacting our business:
PENDING HOME SALES TICK UP IN MAY. Pending sales, or contract signings, increased 1.8% compared with last month and 1.1% on a year-over-year basis, according to data from the National Association of Realtors. All four U.S. regions saw month-over-month increases; on an annual basis, pending home sales increased in the Midwest (+2.6%) and South (+2%), but declined in the Northeast (-0.5%) and West (-1.2%). The spring homebuying season has been off to a slow start, with homes sitting on the market longer and total inventory surpassing 1 million homes for the first time since sinter 2019. As a result, though, buyers are regaining some negotiating power, with price cuts reported on 19.1% of listings in May – the highest share for any May since at least July 2016 when Realtor.com tracking began. Read the full story here.
ELEVATED RATES, CHALLENGING AFFORDABILITY CONDITIONS PUT A DAMPER ON NEW HOME SALES. Sales of newly built single-family homes declined 13.7% in May, falling back to a seasonally adjusted annual rate of 623,000 according to newly released data from the U.S. Department of Housing and Urban Development and the U.S. Census Bureau. This was the slowest pace since October of last year, as mortgage rates averaged 6.83% in May. Sales were particularly slow in the South, with the pace of sales down 21% in May. On a year-to-date basis, new home sales are 3.2% lower thus far in 2025. As a result of slowing home sales conditions, inventory continues to rise, marking an elevated 9.8 months’ supply in May. As estimated by NAHB, total months’ supply, defined as a combination of current new and resale single-family inventory, now stands at 5.2. This is the highest sales-adjusted inventory level since 2015 and will place downward pressure on housing construction starts in the months ahead. New single-family home inventory continued to rise with 507,000 residences marketed for sale as of May. This is 1.4% higher than the previous month and 8.1% higher than a year ago. Read the full story here.
MORTGAGE RATES RETREAT AGAIN AFTER FED CHAIR’S CONGRESSIONAL TESTIMONY. Mortgage rates continued on their downward trajectory on Thursday, slipping to a five-week low, as the markets reacted to fresh comments from Federal Reserve Chair Jerome Powell and the latest Consumer Confidence Index data. The average rate on 30-year fixed home loans decreased to 6.77% for the week ending June 26, down from 6.81% last week, according to Freddie Mac. Rates averaged 6.86% during the same period in 2024. “Borrowers should find comfort in the stability of mortgage rates, which have only fluctuated within a narrow 15-basis point range since mid-April,” says Sam Khater, Freddie Mac’s chief economist. Read the full story here.
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