Pending Home Sales Drop 30% in May, NAR Says

The number of pending home sales plunged in May, after a federal subsidy for buyers expired at the end of April.  The index of pending home resales dropped 30%, the biggest in records dating to 2001, from the prior month, figures from the National Association of Realtors showed today in Washington.

NAR chief economist Lawrence Yun said, “Consumers are rational and they rushed to meet the tax credit eligibility deadline in April. The sharp decline in contract signings in May is a natural result with similar low levels of sales activity anticipated in June,” he said. “Surprisingly, though, some local markets such as Portland, Maine, and Jacksonville, Fla., actually experienced an increase in contract signings from a year ago without the tax credit. Existing-home sales that close in June will remain elevated, but we’ll then see a notable decline for July and August.”