The Pending Home Sales Index decreased 3.7% in May, and fell year-over-year for the first time since August 2014. The Pending Home Sales Index (PHSI), a forward-looking indicator based on signed contracts reported by the National Association of Realtors (NAR), decreased to 110.8 in May from a downwardly revised 115.0 in April, and is 0.2% below the same month a year ago.

The PHSI decreased in all four regions, ranging from 3.1% in the South to 5.3% in the Northeast. Year-over-year, the PHSI remained essentially flat in the Northeast, West and South, while it decreased slightly in the Midwest.

Existing sales continued upward in May to the highest level since early 2007 following three successive monthly increases in the PHSI. That momentum is likely to continue as mortgage rates decline following the decision by the UK to exit the European Union. However, the long-term weakness among first-time buyers continues to dampen all sales in 2016.

Tags: economics, home building, pending home sales, remodeling