The housing market continues to struggle as pending home sales weakened unexpectedly in May. The National Association of Realtors (NAR) reported a 3.7% decrease in its Pending Home Sales Index (PHSI), which is based on contract signings. This decline suggests that closed sales will likely remain soft in the coming months.

Economists had anticipated a slight increase in pending home sales, but the actual figures painted a different picture. The PHSI now stands at 81.3, a level that indicates ongoing challenges in the housing sector.

Several factors are contributing to the housing market’s woes:

• Tight Credit Conditions: Potential homebuyers are still facing difficulties obtaining mortgages.
• Economic Uncertainty: Concerns about the overall economy are making people hesitant to make large purchases.
• Low Consumer Confidence: A lack of confidence in the future is impacting housing demand.

The NAR indicated that the housing market’s recovery is proving to be slower and more uneven than initially hoped. They suggest that a sustained period of job growth and improved consumer sentiment will be necessary to revitalize the sector.