US pending home sales surprise sharply to the upside in June

A closely-followed indicator of US home sales surprised strongly to the upside in May.

The National Association of Home Realtors Pending Home Sales Index jumped at a month-on-month pace of 8.0%.

Economists had expected a 1.0% drop.

All four US regions registered increases both on the month and year-on-year, NAR said.

Ian Shepherdson, chief economist at Pantheon Macroeconomics, was among those who expressed their surprise.

"The data are noisy, but this is exceptional, and we have to expect a correction in June," he said.

"The core story in most of the housing market data is that demand for single-family homes in the burbs has returned to its pre-Covid levels, now that cities are no longer sinkholes of Covid misery. We still think sales will fall a bit further over the next few months, pushing up the months’ supply numbers and taking some of the heat from surge in prices."