T
he National Association of REALTORS reported a slight increase in pending home sales, which may signal the housing market is warming up after a slow start to peak season. According to NAR data, contract signings rose 1.8% in May compared to April and were up 1.1% from last year. This modest growth follows a 6.3% decrease in contract signings in April and a 6.1% increase in March.

    NAR Chief Economist Lawrence Yun attributes the slight rise in sales contracts to consistent job gains and rising wages, which are helping to stabilize the market. However, he notes that mortgage rate fluctuations remain the primary driver of homebuying decisions and impact housing affordability more than wage gains.

    The latest uptick in sales contracts is accompanied by another encouraging sign for the housing market: existing-home sales increased 0.8% in May, marking the first month-over-month gain since February. Yun predicts that if mortgage rates decrease in the second half of the year, home sales nationwide will rise further, driven by strong income growth and a record-high number of jobs.

    The current average 30-year-fixed rate stands at 6.77%, according to Freddie Mac data from June 26.