Did home sales pace pick up in May?

The coming week will be relatively quiet on the economy front, with Wall Street focusing some of its attention on the U.S. housing market.

It's the prime home-selling season and investors will get the latest numbers on sales of existing homes and new ones, following lower-than-expected residential real estate sales in April.

After a 2.3% drop in sales of existing homes in April to an annualized pace of 5.57 million units, analysts expect a similar sales pace in May when results are released Wednesday. Current projections are for a sales pace of 5.55 million homes, a 0.4% decline from April. Pending home sales, which reflect signed contracts that front-run existing home sales by four to six weeks (or the time for buyers and sellers to close on their deals), declined modestly in both March and April, according to Lewis Alexander, an economist at Nomura. That "portends a slowdown in existing home sales," he says.

The sales pace has been slowed by a low supply of homes for sale, which tends to push prices higher, making them less affordable for many people. Still, with long-term interest rates that impact mortgages trending lower (despite the Federal Reserve's second increase of short-term interest rates in 2017 this past week), consumer demand for homes remains strong.

New home sales declined 11.4% in April, to an annualized pace of 569,000. However, when fresh May data is released Friday, a solid rebound is expected. Economists expect new home sales to jump 5.5% to an annualized pace of 600,000 units. "It is possible that a blip in April was likely transitory," Alexander said in a research note.

The health of the housing market, of course, is dependent on multiple factors, such as borrowing costs, the health of the job market and worker wages, as well as the overall health of the U.S. economy.

Elsewhere, equity investors will continue to monitor the recent technology stock selloff, that has been centered mainly in the so-called FAANG stocks, which include Facebook, Apple, Amazon, Netflix and Google parent Alphabet.

Wall Street will also be analyzing economic conditions in the Eurozone. On Friday, a key reading on June manufacturing, known as the flash PMIs, will be released. Europe's improving growth has been viewed positively by investors. Analysts expect the Eurozone June flash PMI to be unchanged from May's level of 56.8. Any number above 50 suggests growth not contraction.