What the index measures
The Pending Home Sales Index tracks contracts signed but not yet closed on existing homes. NAR reported a May reading of 76.8, up 3.8 percent from April and 4.8 percent from May 2025. An index value of 100 equals the contract-signing volume of 2001.
Because a signed contract typically closes in 30 to 60 days, the pending index leads the existing-home sales series that Estate Wire covers separately. It is the single most useful NAR release for reading where resale volume is heading rather than where it has been.
Reading the May reading forward
A 3.8 percent monthly gain in contracts signed in May is consistent with the sales figures NAR subsequently reported for June and July, which held broadly in the 4.0 to 4.1 million annualized range. The lead relationship is not mechanical — contracts fall through, and NAR does not publish a cancellation rate with the index — but the direction proved reliable here.
The index remaining below 80 is itself the more important fact. Contract volume in mid-2026 sat well beneath the levels of the 2010s at the same index base, which is why an improving month still described a slow market rather than a busy one.
Where the following months went
The gain did not carry. NAR's June pending index fell roughly 5.4 percent month over month, and the August index published on September 17 confirmed that contract activity had not recovered the spring level. The May print marks a local peak.
Analysis: pending sales respond faster to mortgage-rate moves than closings do, because a buyer can walk away from a rate quote before signing but rarely after. With Freddie Mac's survey rate climbing through the late summer to 6.95 percent by September 17, the deterioration in contract signings after May is the expected direction, though the index alone cannot attribute the change to rates specifically.
Where the strength was concentrated
The May gain was regionally lopsided. Contract signings rose 8.7 percent month over month in the Northeast and 8.1 percent in the Midwest, against 1.0 percent in the South and 0.7 percent in the West. On a year-over-year basis the Midwest led at 9.3 percent, followed by the Northeast at 6.1 percent, the South at 3.3 percent and the West at 1.2 percent.
Among the largest metropolitan areas, the strongest annual gains were in Kansas City at 20.1 percent, San Antonio at 15.7 percent and Minneapolis at 13.9 percent — all Midwestern or Texan markets rather than the coastal metros that led the previous cycle.
Context from NAR's own analysis puts the improvement in proportion. Even after the May increase, the index remained 28.4 percent below its pre-pandemic May 2019 level. The South index stood at 90.8 against a 2019 base of 100, the West was roughly 42 percent below its 2019 level, and the Midwest had recovered from 72.1 in 2024 to 81.1 in 2026. A strong month in this series is measured against a low base.