Residential real estate made a huge comeback in May, with pending home sales jumping by 44.3% month-over-month. That is the highest month to month gain in pending sales that the National Association of Realtors has ever tracked, and it is a strong indication that the residential real estate market is robust heading into the summer season.
Pending home sales is one of the key indicators of the strength of the residential real estate market because it is a measure of signed purchase contracts for homes, condominiums, and co-ops. This indicator was negative for the first two months of the pandemic in the northeastern United States, when New York, New Jersey, and Connecticut bore the brunt of the pandemic. A large, positive jump in this metric is a sign that real estate activity in the northeast has picked up.
The closing process for residential real estate often takes between one and two months to complete. Given that timetable, it is expected that July and August will see a much greater volume of completed home sales as the jump in signed contracts from May matures into closings.