May pending-home sales hit their highest level since 2005, with unexpected rises of 8% on a monthly basis and 13.1% on an annual one, the National Association of Realtors reported, citing its Pending Home Sales Index.

“May’s strong increase in transactions — following April’s decline, as well as a sudden erosion in home affordability — was indeed a surprise,” NAR chief economist Lawrence Yun said in a press release. “The housing market is attracting buyers due to the decline in mortgage rates, which fell below 3%, and from an uptick in listings.”

All four geographic regions saw increases, led by the Northeast, which clocked a 15.5% rise from April, and the West, which rose 10.9%. Pending transactions rose 6.7% in the Midwest and 4.9% in the South.

“Home-price growth will steadily moderate with increased supply, but a broad and prolonged decline in prices is unlikely,” Yun said. “However, if a reduction occurs in some markets, homebuyers will view the lower home price as a second-chance opportunity to get into the market after being outbid in previous multiple-bid market conditions.”

Keller Williams chief economist Ruben Gonzalez cautioned that the surprise uptick in pending sales is unlikely to represent a trend.

“We believe existing home sales are going to see much harder year-over-year comparisons for the remainder of the year, as the base for comparison moves away from the slump generated in the early months of the pandemic and into the surge in home sales that followed,” he said in a statement. “With the pressure on sales from the lack of inventory and rapidly rising prices, we are likely going to see sales start moving toward single-digit year-over-year growth and perhaps some year-over-year declines in Q4, due to last year’s divergence from normal seasonal patterns.”