The U.S. housing market has been plagued by high prices, high mortgage rates, and an increasing inventory of homes. However, new data from the National Association of Realtors (NAR) offers a glimmer of hope for a recovery.
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May’s pending home sales increased by 1.8% month-over-month. That came in above the estimate for a 0.1% rise and recovered from a steep 6.3% fall in April. All four U.S. regions experienced a monthly rise in pending home sales.
U.S. Wages Rising Faster than Home Prices
“Consistent job gains and rising wages are modestly helping the housing market,” said NAR Chief Economist Lawrence Yun. “Hourly wages are increasing faster than home prices.” The median home sales price is still hovering near the all-time high set during the fourth quarter of 2022.
Pending home sales can act as a gauge of consumer confidence, as they are likely the most expensive purchase a consumer will ever make. If a consumer is willing to purchase a home, that signals they hold a positive view on their finances and the economic outlook. A recovering pending home sales figure bodes well for both the housing market and the stock market and helps mortgage-related companies as well.
Housing stocks are mixed on the day as the market digests the news.
