After crashing in April, analysts expected a small rebound in pending home sales in May, but they didn't.

Instead, sales tumbled 2.1% MoM...

Source: Bloomberg

That dragged the YoY change down 6.6% to a new record low...

Source: Bloomberg

“The market is at an interesting point with rising inventory and lower demand,” NAR Chief Economist Lawrence Yun said in a statement.

“Supply and demand movements suggest easing home price appreciation in upcoming months. Inevitably, more inventory in a job-creating economy will lead to greater home buying, especially when mortgage rates descend.”

Potential homebuyers are turned off by high selling prices, which hit a record $419,300 in May, although the market is gradually seeing a pickup in listings.

On a call with reporters last week, Yun noted optimistically that the supply of existing homes was up more than 18% from a year ago.

“Let’s wait to see if this leads to more home sales,” he said.

More problematically, the pending-sales figures tend to be a leading indicator of sales of previously owned homes, because houses typically go under contract a month or two before they’re sold.