May pending-home sales slid 2.7% compared to April and fell 22.2% from a year earlier as low inventory continued to keep transactions at a slow tempo, the National Association of REALTORS® reported, citing its Pending Home Sales Index.    

“Despite sluggish pending contract signings, the housing market is resilient with approximately three offers for each listing,” NAR Chief Economist Lawrence Yun said in a press release. “The lack of housing inventory continues to prevent housing demand from being fully realized.”  

Pending sales, in which the contract has been signed but the transaction has not closed, are considered a leading indicator and generally precede existing-home sales by a month or two.             

“There is plenty of demand on the sidelines, the labor market remains strong, and potential home buyers are ready to jump in,” First American Economist Ksenia Potapov said. “While limited inventory is likely to hold back sales activity, the housing market remains resilient.” 

Regionally, pending home sales jumped in the Northeast but were lower in the Midwest, West and South.  

“The spring home-buying season has struggled to gain momentum. Mortgage rates remain high, reducing house-buying power and keeping existing homeowners rate-locked into their homes,” Potapov said. “As a result, the inventory of homes for sale, which typically increases throughout the spring and summer months, has remained near winter lows.”