Contract signings rose across all four US regions in May, the latest sign buyers are adjusting to elevated mortgage rates
Pending home sales rose 3.8% month over month and 4.8% year over year in May 2026, according to NAR data released June 17. The gain pushed the National Association of Realtors (NAR) Pending Home Sales Index to 76.8, its highest reading since last November.
NAR Chief Economist Dr. Lawrence Yun said the data pointed to a decisive psychological shift among American homebuyers. "A late spring buyer rush — even with mortgage rates not budging — is an indication of pent-up housing demand and consumers' acceptance of above-6% mortgage rates as the new normal," Yun said.
The 30-year fixed-rate mortgage averaged 6.52% as of June 11, 2026, according to Freddie Mac's Primary Mortgage Market Survey, down from 6.89% a year earlier but still elevated by historical standards.
All four regions post contract gains
May's pending sales advance was broad-based, with contract activity rising across every region.That's the first time that has happened this spring.
The Northeast led the country with an 8.7% monthly increase and a 6.1% year-over-year gain, a notable turn for an inventory-constrained market that posted slower sales for several consecutive months.
The Midwest followed with an 8.1% monthly rise and the strongest annual gain of any region at 9.3%. The South and West were more measured, advancing 1.0% and 0.7% for the month and 3.3% and 1.2% year over year, respectively.
Yun flagged ongoing supply pressure in the Northeast as a key concern: "The inventory-constrained Northeast region, which has seen faster home price growth but slower home sales for several months, is now showing more buyer contract signings. More supply is needed to help moderate home price growth."
At the metro level, Kansas City, MO-KS topped the Realtor.com Economics ranking of the 50 largest markets with a 20.1% annual gain in pending sales. San Antonio, TX followed at 15.7%, with Minneapolis, MN at 13.9%.
Read more: Pending home sales climb for third straight month
Rates outlook: modest relief ahead, structural headwinds remain
On borrowing costs, Yun delivered a tempered forecast. "Going forward, falling oil prices will help lower mortgage rates," he said.
"But declines will be modest given sizable borrowing by the federal government and strong AI investment spending by tech companies." With prospects for sub-6% mortgage rates dimming further in 2026, the industry's focus has increasingly shifted toward qualifying buyers within the current rate band.
Jason Madiedo, CEO and Co-Founder of SimplyPMG, a Las Vegas-based independent mortgage bank, saw May's data as evidence of a market rebalancing in buyers' favor, even if the pace remains slow.
"Nationally, homes are not changing hands as quickly as they should, and that is helping create a healthier, more balanced market for buyers," Madiedo said. "Buyers have more choices today, and we believe that is a good thing for the market."
He pointed to a longer-term risk in builder pullbacks. "Builders are confirming that pressure by slowing starts to their lowest levels in years, which is not good for the market over the long term," Madiedo said.
"The administration needs to act fast with real solutions and incentives to keep the housing market healthy and avoid putting it under more strain, but any such measures remain months away from taking effect."
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