Pending home sales ticked up again in April, signaling further sales growth to kick off summer.
The National Association of Realtors (NAR) recorded a 0.4 percent gain in its Pending Home Sales Index (PHSI) for April, bringing it up to 97.8. A measure of contract signings, the index serves as a forward-looking indicator for future sales activity.
"Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective buyers' confidence," said Lawrence Yun, chief economist at NAR.
Compared to last year, pending sales were still slow, falling 9.2 percent from April 2013 as rising housing costs and diminished supply hinder buyers. With activity just now starting to pick up after a weak first quarter, the group expects annual existing-home sales this year to come in "modestly below" last year's total of 5.1 million before recovering to an anticipated 5.3 million next year.
However, with mortgage rates and home prices still trending upward, Yun says sales conditions will also depend on income growth to match those increases, along with changes in the labor market and in mortgage underwriting conditions.
"An uptrend in closed sales is expected, although some months will encounter a modest setback," he said.
A pickup would be welcome news for the existing single-family home market, which saw sales steadily decline until finally improving in April for the first time this year.
Around the country, pending sales bumped up 0.6 percent in the Northeast and 5.0 percent in the Midwest compared to March. Those increases were offset slightly by declines of 0.6 percent and 2.9 percent in the South and West.
Relative to April 2013, sales numbers were down in all regions, with declines ranging from 6.4 percent in the South to 15.0 percent in the West.