The U.S. real estate market showed a clear momentum of recovery in May. In recent years, high home prices and high interest rates have jointly suppressed homebuying demand, but as consumers gradually adapt to higher financing costs, the market is showing signs of stabilization. According to data from Freddie Mac, the average interest rate for a 30-year fixed-rate mortgage in the United States in May 2026 was 6.44%, up from the previous month and reaching a new high since August of last year.
According to the latest data from the National Association of Realtors (NAR), the Pending Home Sales Index rose 3.8% month-over-month in May to 76.8, marking the fourth consecutive month of increase and reaching its highest level in nearly six months. This figure is far higher than the market expectation of a 0.8% increase, and it is also the largest single-month increase since September 2024. On a year-over-year basis, the index rose 4.8% compared to the same period last year. Because contract signing data typically precede completed transactions by about one to two months, this indicator is widely regarded as a key leading indicator for judging future home sales trends.
It is worth noting that despite the recent improvement in data, the overall activity level of U.S. housing transactions remains far below historical peaks. NAR data shows that with the year 2001 set as a baseline value of 100, the current signing index level of 76.8 is still significantly below the long-term average. Since 2001, this pending sales index has fallen by approximately 26.3%, while during the same period, existing home sales have decreased by about 21.2%, and the total U.S. population has grown by about 20.7%. This means that when population factors are taken into account, the actual decline in market activity is even more pronounced. Currently, the index is about 40% lower than its historical high in August 2020, and after population adjustment, it is about 48% lower than the peak during the housing market boom in 2005.
NAR Chief Economist Lawrence Yun stated that despite persistently high mortgage interest rates, spring homebuying demand has rebounded significantly, indicating that previously suppressed market purchasing power is gradually being released. Regarding future trends, the recent decline in international oil prices is expected to help lower long-term interest rates, providing some downward room for mortgage costs. However, due to the substantial financing needs of the federal government and the continued large-scale capital investments by technology companies in the field of artificial intelligence, the extent of interest rate declines is expected to be relatively limited. Overall, as homebuyer sentiment adjusts and market inventory improves, the U.S. housing market may maintain a moderate recovery in the second half of the year. Nevertheless, whether mortgage interest rates can substantially decrease and whether housing supply can be effectively increased remain key variables determining the sustainability of the recovery.
