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).
The avg. 30-Yr FRM holds at 3.13% https://t.co/Cj2GH9Tofy
Chief Economist @TheSamKhater: “Purchase demand has rebounded, partly reflecting deferred sales as well as continued interest from prospective buyers looking to take advantage of the low mortgage rate environment.” pic.twitter.com/xuR0dpXYTW
— Freddie Mac (@FreddieMac) June 25, 2020
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.
— Maryland REALTORS® (@MDRealtors) June 11, 2020