According to the National Association of Realtors, May's pending home sales fell 2.1% month over month, compared to an expected 0.5% increase.

Yahoo Finance anchors Madison Mills and Seana Smith break down this latest development for the housing market and what it means for the sector moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Catalysts.

This post was written by Nicholas Jacobino

Video Transcript

All.

We want to start with some breaking news that we have out right now on housing pending home sales falling 2.1% in the most recent monthly.

On a month over month basis, the estimate was for an increase of a half of a percent.

When you take a look at some of these other numbers on a regional basis, Northeast sales actually increasing 1.1% on a month over month basis in the Midwest it fell in the South, falling 5.5% in the West, though it was up 1.4% on a month over month basis.

Why do we look at this?

Well, this is actually a leading indicator or largely viewed as a leading indicator of existing home sales, which we will get here, uh, very soon, but again, pending home sales falling 2.1% on a month over month basis, down 6.6% here, Matty from the previous year this fell.

This is following rather new home sales to the slowest pace since November.

I find it interesting with the print here, and a R is predicting the more trade are still going to remain above 6% in both 2024 and 2025.

And they add that that will come despite what the Federal Reserve chooses to do with regards to interest rates.

So that indicates to me that that could be an issue moving forward for the feds inflation targets because we know that one potential driver of inflation is the fact that people are locked into their houses were not seeing as much movement in the housing market.

Today's data confirming that with this decrease in pending home sales, that leaves people open to spending opportunities elsewhere.

And that could be one potential driver of inflation.

We even heard the president speaking about this.

He spoke about it in the last State of the Union in regards to how the challenges in the housing market are potentially fueling broader inflation challenges, that the Fed is trying to fight back on today's data, confirming that in terms of the market action, though not a huge impact, at least when you look at the equity space, you're looking at gains across the S and P, though just around the flat line there, and the NASDAQ is up about 3/10 of a percent