WASHINGTON – The number of Americans who signed contracts to buy homes shot up in May. But the pace of buying this year remains slower than in 2013, in part because of sluggish sales during winter.
The National Association of Realtors said Monday that its seasonally adjusted pending home sales index rose 6.1 percent to 103.9 last month. It was the sharpest month-over-month gain since April 2010. The index remains 5.2 percent below its level a year ago.
Pending sales are a barometer of future purchases. A one- to two-month lag usually exists between a contract and a completed sale.
Lower mortgage rates and increased supplies of homes on the market drove much of last month’s gains. Signed contracts rose in all four U.S. regions: the Northeast, Midwest, South and West.
The housing market is finally showing signs of momentum, though overall buying remains slower than last year.
“The sector continues to put the horrid (winter) weather behind it and is moving on,” said Jennifer Lee, senior economist at BMO Capital Markets. “It certainly helps that confidence is higher, borrowing costs are slipped from the start of the year and it is reportedly becoming less strenuous to obtain a mortgage.”
In a separate report last week, the Realtors said completed sales of existing homes rose 4.9 percent in May to a seasonally adjusted annual rate of 4.89 million homes. Still, sales are down 5 percent year-over-year.