Recently, everyone seems to be looking for signs that an economic recovery is coming soon. Many experts predict that it will be starting by the 3rd quarter of this year. Pending Home Sales increased by 44.3% in May, which registered as the highest month-over-month gain in the index since January 2001 when the National Association of Realtors (NAR) started tracking this metric. 

Pending home sales is a key indicator to determine the stability of the housing market. Ultimately, it measures how many existing homes went into contract in a specific month. Since a home goes under contract on average about two months before it is sold, we can expect to see closings picking up in the next two months. 

Due to the COVID-19 pandemic, there was a sharp decline in the number of houses that went into contract. However, in May buyers jumped back into the market and started to purchase more homes.

Even so, to meet the demand of buyers and continue this upward trend, there needs to be more houses for sale on the market. As a result, as we move through the year, we may see an increase in the number of houses being built. Fortunately, this upward trend is supported by builders. They have reported an increase in demand for single-family homes in suburban neighborhoods with lower-density. 

According to to the National Association of Home Builders (NAHB), “In a sign that housing stands poised to lead a post-pandemic economic recovery, builder confidence in the market for newly-built single-family homes jumped 21 points to 58 in June, according to the latest National Association of Home Builders/Wells Fargo Housing Market Index (HMI). Any reading above 50 indicates a positive market.” 

As the nation reopens, real estate is well-positioned to lead the economy forward. This past spring, if you decided not to sell your home, now might be time to put your house out back on the market.