May Pending Home Sales Will Rebound Significantly

As I already noted, pending home sales (PHS) should rebound in May reflecting normalization of transitory factors (lockdowns and lack of supply) and improving fundamentals.

In a context where mortgage rates kept declining (supporting buying activity), local/state data confirmed that pending home sales will rebound sharply in May and should even exceed expectations (+19.3%e MoM according to Bloomberg consensus).



As a matter of fact, a smaller decline on a YoY basis compared to April (-34.6% YoY) would be sufficient for PHS to rebound on a MoM basis (after seasonal adjustment). However, it’s interesting note that several areas, such as Maryland, posted a bounce on YoY basis, suggesting that a significant rebound is very likely.


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