U.S. Pending Home Sales Report: May 2025 – What it Means for International Investors

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For international real estate investors, staying on the pulse of the U.S. housing market is vital. The latest report on pending home sales is in, and it shows how many homes are under contract to be sold. This number tells us about future sales activity. It helps you plan your U.S. property investment. It also helps ensure consistent cash flow from your rentals.

This article breaks down the National Association of Realtors (NAR) Pending Home Sales Report for May 2025. We will look at the key numbers. We will see what these trends mean for your long-term wealth growth. And we will explore how a trusted partner can help you navigate these shifts.

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Key Takeaways: Pending Home Sales & Investor Outlook

• Small Increase: U.S. pending home sales rose slightly by 1.8% in May 2025 from April. This is a positive sign.

• Still Lower Than Last Year: Sales are still down 6.6% compared to May 2024. This shows the market faces ongoing challenges.

• High Rates & Low Supply: High mortgage rates and limited affordable homes continue to make buying hard for many. This often boosts rental demand.

• Regional Differences: Some regions, like the Northeast and Midwest, saw sales go up. Others, like the South and West, saw sales go down.

• Modest Outlook: Experts expect small improvements in the market later this year. This could bring more stability for property investors.

• Opportunity for Rentals: Buying challenges often mean more people need to rent. This creates chances for consistent cash flow rentals.

Related: The Best Places to invest in U.S. Real Estate in 2025: States, Cities, and Neighbourhoods

Section 1: The Latest Numbers – What the Report Shows

The National Association of Realtors (NAR) gives us key insights into the housing market. Their latest report for May 2025 shows a mixed picture.

Pending Home Sales Edge Up in May

The report shows that the number of homes under contract went up slightly in May.

• Month-over-Month Change: Pending home sales increased by 1.8% in May 2025 compared to April 2025.

• Year-over-Year Change: Despite this monthly gain, pending sales were still down 6.6% compared to May 2024.

This means that while some buyers are stepping into the market now, the overall buying activity is less than it was a year ago.

Lawrence Yun, NAR’s Chief Economist, commented on these numbers: “The increase in pending sales in May is an encouraging sign for the housing market. However, with elevated mortgage rates, contract signings remain below last year’s levels.” This highlights the challenge that high interest rates bring.

Regional Performance Varies

Not all parts of the U.S. saw the same trend. The report showed clear differences by region:

• Northeast: Pending sales increased by 7.2%.
• Midwest: Pending sales rose by 7.5%.
• South: Pending sales decreased by 1.6%.
• West: Pending sales dropped by 0.8%.

This shows that the U.S. housing market is not one single market. Conditions can be very different from one region to another. For inversores internacionales, this means local market research is always key.

Related: Foreign National Loans: Your Essential Guide to U.S. Mortgages for Non-Residents and Foreign Nationals

Section 2: Why These Trends Matter for International Investors

These pending sales figures directly impact your goals for U.S. property investment. They affect both property values and rental income.

High Rates Still a Challenge for Buyers

Mortgage rates remain high. This is a big hurdle for many people wanting to buy a home. Lawrence Yun from NAR states: “Despite the slight increase, the market remains challenged by high interest rates and a lack of inventory, particularly at affordable price points.”

What does this mean for you, an international investor?

• Fewer Homebuyers: If fewer people can afford to buy, more people need to rent. This increases the pool of potential tenants.

• Steady Rental Demand: Strong rental demand helps keep your properties occupied. It supports consistent cash flow rentals.

• Slower Price Growth: Less buying activity can mean that property values may not grow as fast as in past years. This shifts the focus more toward cash flow rather than rapid appreciation for long-term wealth.

Impact on Property Appreciation

The year-over-year decline in pending sales suggests that overall market conditions are still cooling. This means that rapid property value increases are less likely in the near term. Your strategy for long-term wealth growth should focus on stable markets. Look for areas where rental income is reliable. This helps you pay down your mortgage and build equity steadily.

Avoiding Mistakes: The Importance of Due Diligence

In a market with mixed signals, due diligence is more important than ever. You want to avoid buying the wrong kind of property. A trusted partner can help you:

• Analyze local market data beyond just national headlines.
• Identify properties that are correctly priced for current conditions.
• Ensure the property’s rental potential matches your cash flow goals.

Related: U.S. Housing Market Forecast 2025 to 2023: Everything You Need to Know

Section 3: Regional Differences and Strategic Insights

The varied performance across regions offers key lessons for international real estate investors. Your investment strategy should be adaptable.

Northeast and Midwest: Signs of Life

The increases in pending sales in the Northeast and Midwest are worth noting. These regions might offer more stability or even modest growth. This could be due to:

• More affordable prices compared to coastal areas.
• Stable local economies.
• Less intense competition among buyers.

For investors seeking consistent cash flow, these markets might present opportunities. They could have a good balance of affordable purchase prices and steady rental demand.

South and West: Continued Cooling

The South and West, which saw declines in pending sales, might be experiencing a different market phase. These regions often saw huge price increases during the pandemic. Now, they may be cooling off more significantly. This can be due to:

• Over-affordability issues after rapid price hikes.
• Some slowdown in population migration.
• Higher insurance costs in certain areas (especially coastal Florida).

In these regions, inversores internacionales need to be extra cautious. Focus on very strong due diligence. Ensure that the property offers truly consistent cash flow despite any potential for slower appreciation or higher operating costs.

How a Trusted Partner Helps

Navigating these regional differences and market complexities is challenging. An experienced, trusted partner can provide:

• Market Research: Help you pinpoint which state, city, or local markets are best to invest in.

• Property Selection: Guide you on what kind of properties make good investments and where to find them.

• Financing Expertise: Help you understand all financing options and get approved for the right mortgage loan. This includes options for foreigners and non-residents.

• Property Management: Handle everything from tenant marketing to rent collection and repairs, especially if you are managing from overseas.

• Tax Efficiency: Advise on how to set up your investment for tax efficiency and personal liability protection, like choosing the right U.S. entity (LLC, C-Corp, trust).

Related: Your Essential Guide to U.S. Taxes for Non-Resident Real Estate Investors

Conclusion: Making Informed Investment Decisions

The May 2025 Pending Home Sales Report offers a detailed look at the U.S. housing market. It shows small positive signs month-over-month. But it also points to ongoing challenges like high rates and regional differences.

For international real estate investors, this means a careful approach is best. Focus on markets that support your goal of consistent cash flow rentals. Aim for properties that offer solid long-term wealth growth through mortgage paydown and steady appreciation. By staying informed, conducting thorough due diligence, and partnering with experienced local experts, you can make smart decisions in this evolving market. This helps you avoid mistakes and secure profitable U.S. property investment.

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Frequently Asked Questions (FAQs) About Pending Home Sales for Investors

• Q1: What are “pending home sales,” and why are they important for investors? A1: Pending home sales are contracts signed for homes that are expected to close within one or two months. They are important because they show current buyer demand and are a leading indicator of future closed sales, helping inversores internacionales predict market activity.

• Q2: Did U.S. pending home sales increase or decrease in May 2025? A2: U.S. pending home sales increased by 1.8% in May 2025 compared to April. However, they were still down by 6.6% compared to May 2024, showing a slight recovery but continued overall challenge.

• Q3: How do high mortgage rates affect the housing market and rental demand? A3: High mortgage rates make buying a home more expensive. This reduces the number of people who can afford to buy. As a result, more people choose to rent, which increases demand for cash flow rentals and can support rental income for inversores internacionales.

• Q4: Are there differences in pending home sales across U.S. regions? A4: Yes. In May 2025, the Northeast (+7.2%) and Midwest (+7.5%) saw increases in pending sales. The South (-1.6%) and West (-0.8%) saw slight decreases. This shows that local market conditions vary.

• Q5: How can a trusted partner help international investors navigate these market trends? A5: A trusted partner can provide expert market research, assist with due diligence to avoid problem properties, help with financing options for non-residents, and manage properties to ensure consistent cash flow. They can also advise on tax efficiency and liability protection.

• Q6: What is the primary goal for international investors in the U.S. real estate market when looking at these trends? A6: The primary goal is to grow long-term wealth by buying quality properties and generating consistent cash flow rentals to pay down mortgages. Understanding these market trends helps in selecting properties that support this goal.