US pending home sales increase to a six-month high in May

WASHINGTON, June 17 (Reuters) - ‌Contracts to ​purchase ​previously owned U.S. homes increased more than expected in May, though higher mortgage rates ‌and tight supply remained constraints for the ⁠housing market.

The pending home sales index rose 3.8% last month ‌to 76.8, the highest ‌level since last November, the National Association of Realtors said on Wednesday. Economists polled by Reuters ​had forecast contracts, which become sales after a month or two, increasing 0.8%. Contracts increased ⁠in all four regions, soaring 8.7% in the Northeast and surging ​8.1% in the Midwest.

They jumped 4.8% year-on-year in May.

Mortgage rates have risen as the ​U.S.-backed war with Iran drove ‌up oil prices, boosting inflation and Treasury yields. The rate on the popular ⁠30-year fixed-mortgage has increased more than 50 basis points since the conflict started in late February, data from ⁠mortgage finance agency Freddie Mac showed.

Washington and Tehran on Sunday ​said they had agreed terms to end the war and reopen the Strait of Hormuz.

"The inventory-constrained Northeast region, which ‌has seen faster home price growth but slower home sales for several months, ‌is now showing more buyer contract signings," said ⁠Lawrence Yun, the NAR's ‌chief economist. "More supply ​is needed to help moderate home price growth."

(Reporting by Lucia Mutikani; Editing by Andrea ‌Ricci)

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