Pending Home Sales Up in May as 'Pent-Up Demand' Boils

Summer arrives with a positive sign for the housing market, as the National Association of Realtors®’ (NAR) pending home sales report shows growth month-over-month and year-over-year in May 2026. Gains were felt across all four major regions of the United States.

“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,” said NAR Chief Economist Lawrence Yun in the association’s statement on the report.

“Going forward, falling oil prices will help lower mortgage rates,” Yun continued. “But declines will be modest given sizable borrowing by the federal government and strong AI investment spending by tech companies.”

As of June 15, President Donald Trump has signed a “virtual agreement” to end a U.S. blockade of Iranian ports and reopen the Strait of Hormuz, pending negotiations for a finalized truce that would bring an end to the U.S. and Israel’s war with Iran that kicked off earlier this year. The conflict, and resulting spikes in oil prices, was widely linked to this year’s spike in inflation.

In a statement on the Pending Sales report, Realtor.com® Chief Economist Hannah Jones said that “If (the U.S. and Iran) resolution holds and leads to lasting peace, inflation should ease, bringing mortgage rates, and with them, housing affordability, along for the ride.”

Jones added that, assessing May market conditions, “rates remained below year-ago levels and near their lowest May reading in several years, creating more opportunity for buyers,” and that “the spring housing market has shown resilience.”

“Listing prices fell 2.4% in May, and the share of price reductions also declined. Together, these signals suggest sellers are pricing more realistically for today’s market, and buyers are responding. Active listing growth has stalled and time on market has leveled off near year-ago levels as the market absorbs fresh, well-priced inventory,” said Jones.

Not all housing economists were as optimistic, though.

“Despite today’s report and the obvious pent-up demand, there are still headwinds in the housing market. Affordability continues to be a constraint to all but the highest-income buyers,” said Bright MLS Chief Economist Lisa Sturtevant in a statement; she cited both NAR’s own findings on existing-home sales that showed prices rising, and a report from Zillow that starter homes alone cost more than $1 million in almost 250 U.S. cities.

“The affordability challenge is accompanied by growing economic uncertainty and rising inflation. More would-be buyers, particularly first-time and moderate-income buyers, are being priced out of the market, while high-end buyers continue to drive market activity,” Sturtevant continued, saying the economic uncertainty will also cause sellers to hold back from entering the market.

“While inventory had been on the rise, in recent weeks, we have seen year-over-year declines in inventory in some markets,” Sturtevant concluded. “Therefore, even in markets where there are ready buyers, there will be fewer options to choose from which will result in slower-than-expected transactions this summer.”

Regional breakdown

Of the four major U.S. regions, the Northeast and Midwest—which have in recent history lagged behind the southern and western housing markets in supply—showed the strongest growth in pending sales.

Month-over-month, pending sales increased by 8.7% in the Northeast and by 8.1% in the Midwest. Annually, the Northeast experienced a 6.1% increase in pending sales, while the Midwest outpaced even further at a 9.3% annual increase.

“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,” said Yun.

The West and South showed more moderate growth in pending home sales but were still in the positive as of May. In the South, pending home sales increased by 1% month-over-month and by 3.3% annually. The West saw the smallest overall growth in pending sales, at 0.7% monthly and 1.2% annually.

The South showed stronger growth on the local level. Among the 50 largest metro areas in the United States, the 10 that saw the greatest annual increases in pending home sales were all located in the Midwest or the South: