The U.S. property market sees signs of recovery as the pending home sales index for May reaches its highest level in nearly six months.

The US real estate market showed clear signs of a rebound in May this year. The latest data released by the National Association of Realtors (NAR) shows that the Pending Home Sales Index for existing homes increased by 3.8% in May, reaching 76.8, marking the fourth consecutive month of growth and the highest level in nearly six months. This is not only significantly higher than the market's expected 0.8%, but also the largest monthly increase since September 2024. Compared to the same period last year, the index increased by 4.8%. Since it usually takes one to two months to complete a transaction after signing, this indicator is considered a leading indicator of future home sales. Lawrence Yun, Chief Economist of the National Association of Realtors, stated that despite the continued high mortgage rates, spring home buying demand has continued to rise significantly, reflecting the gradual release of pent-up housing demand. Yun pointed out, "Even though mortgage rates have not significantly decreased, there is still a spring buying frenzy, indicating a significant backlog of demand in the market and consumers are gradually accepting mortgage rates above 6% as the new normal." He specifically mentioned that the Northeast region of the US previously experienced a slowdown in transactions due to limited housing supply and rapid price increases, but buyer signings have begun to rebound recently. However, he believes that increasing housing supply is still key to easing pressure on rising prices. Although the real estate market has shown signs of recovery recently, long-term data shows that housing transactions in the US are still far below historical highs. According to NAR data, with a base value of 100 in 2001, the current index level of 76.8 is still significantly below the historical average level. Since 2001, the cumulative pending sales index in the US has decreased by about 26.3%, while the number of existing home sales has decreased by about 21.2%. During the same period, the US population has grown by about 20.7%, indicating a more significant decline in market activity. The current pending sales index is still about 40% lower than the historical high set in August 2020. Adjusted for population growth, the index is about 48% lower compared to the peak of the real estate market boom in 2005. High housing prices and high interest rates have jointly suppressed housing demand in recent years, but as consumers gradually adapt to higher financing costs, the real estate market is showing signs of stabilization. According to data from the US mortgage lender Freddie Mac, the average interest rate for a 30-year fixed-rate mortgage in the US in May 2026 was 6.44%, slightly higher than the previous few months and the highest level since August last year. Looking ahead, Yun predicts that the recent drop in international oil prices may help lower long-term interest rates, providing some downward space for mortgage rates. However, he also points out that due to the significant financing needs of the US federal government and the continued large-scale capital investment by technology companies in the field of artificial intelligence (AI), the extent of interest rate declines is expected to be relatively limited. As homebuyers gradually adapt to the high-interest rate environment and market inventory improves, the US real estate market is expected to continue its moderate recovery in the second half of the year. However, whether mortgage rates will substantially decrease and whether housing supply can effectively increase will still be key factors in determining whether the market can continue to rebound.