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First Cut: May Pending Home Sales Index points to higher sales in coming months

The NAR’s Pending Home Sales Index for May rose 1.1% to 105.4, pointing to improved sales of existing homes in the coming month or two. The index — while off the highs in the first half of 2018 — reflects a respectable pace of sales and one that has responded as swiftly to the declines in mortgage interest rates as it did to increases in rates in the second half of 2018. The index was down 0.7% compared to the 106.1 of May 2018, but the present level seems sustainable and consistent with renewed activity in the housing market.

The index was up for all four regions. To be sure, there was only a scant 0.1% increase in the South, but that was in the wake of two strong months. The indexes for the Northeast (up 3.5%), Midwest (up 3.6%), and West (up 4.9%) all indicated that activity has firmed and the spring homebuying season may extend into the summer months.

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