The National Association of Realtors (NAR) announced on Wednesday its seasonally adjusted pending home sales index (PHSI) surged 8.0 percent m-o-m to 114.7 in May, after an unrevised 4.4 percent m-o-m decrease in April.

Economists had expected pending home sales to decrease 0.8 percent m-o-m in May.

On y-o-y basis, the index climbed 13.1 percent after an unrevised 51.7 percent jump in April.

According to the report, all four regional indices recorded gains both in m-o-m and y-o-y terms. The Northeast PHSI surged 15.5 percent m-o-m to 98.5 in May, a 54.6 percent climb from a year ago. The index in the West jumped 10.9 percent m-o-m to 102.0, up 12.5 percent from a year prior. The PHSI for the Midwest rose 6.7 percent m-o-m to 107.7, up 7.8 percent from May 2020. Pending home sales transactions in the South increased 4.9 percent m-o-m to an index of 135.5, up 6.1 percent from a year prior.

May's strong increase in transactions - following April's decline, as well as a sudden erosion in home affordability - was indeed a surprise," noted Lawrence Yun, NAR's chief economist. "The housing market is attracting buyers due to the decline in mortgage rates, which fell below 3%, and from an uptick in listings." Although there has been a series of obstacles over the last year, including an unprecedented pandemic, record-high prices and all-time low inventory, buyers are still lining up at a feverish pace, Yun added.