Mixed Signals: Housing Market Shows Signs of Recovery Amidst Worsening Conditions

The number of homes on the market fell short of demand in May, leading to a 2.7% drop in pending home sales, according to the National Association of Realtors. The lack of housing inventory and elevated prices and mortgage rates are preventing housing demand from being fully realized. Home prices have been propped up by bidding wars as buyers compete for a limited supply of homes, with 37% of homes sold in May going above their asking price. Sales of new homes have increased, but the supply from new construction remains insufficient to meet demand.