June 29 (UPI) -- Pending U.S. home sales rebounded more than 44 percent in May, the largest increase ever, a report released Monday by the National Association of Realtors said.
After two months of declines during the international pandemic, the realtor association's Pending Home Sales Index, based on contract signings before a home is sold, soared to the highest month-over-month gain since the index began in 2001, the association said.
"This has been a spectacular recovery for contract signings, and goes to show the resiliency of American consumers and their evergreen desire for homeownership," said Lawrence Yun, spokesman for the real estate association.
"This bounce back also speaks to how the housing sector could lead the way for a broader economic recovery," Yun added.
Because a home goes under contract a month or two before it is sold, the Pending Home Sales Index is a crystal ball the real estate industry uses to predict existing home sales months before official sales totals are reported.
During the pandemic in April, pending home sales fell 34 percent compared to the same month in 2019.
In May, the picture was rosier. Year-over-year home sale contracts for condos, townhomes and single-family houses rose 44.3 percent to an index level of 99.6 in May. A level of 100 is equal to the contract activity in 2001, when the index began. Year-over-year the number of contracts signed fell by 5.1 percent, the group said.
The northeast United States saw the biggest drop in contracts for homes that were not yet sold. Year-over-year contracts for May dropped by 33.2 percent to an index of 61.5. Other regions of the United States rose or dropped by less than 3 percent. Pending home sales in the South increased 43.3 percent to an index of 125.5 in May, up 1.9 percent from May 2019.
Even with the nationwide job losses and pandemic disruption, new home sales are expected to be higher this year than last, and sales of existing home sales are expected to be down by less than 10 percent, the organization said.
The group predicted that existing-home sales would reach 4.93 million units in 2020 and new home sales would hit 690,000.
Some areas of the country have seen a greater than 10 percent increase in listings from April to May according to Realtor.com. Metros with listing growth included Honolulu, San Francisco, and San Jose, Calif., and Denver and Colorado Springs, Colo.