Contracts for home sales improved annually in September, marking the first year-over-year increase so far in 2014.
The National Association of Realtors' (NAR) Pending Home Sales Index, a forward-looking gauge of home sales based on contract signings, ticked up 0.3 percent to 105 from August's 104.7, the group reported. Compared to a year ago, the index climbed 1 percent—the first yearly increase in 11 months.
September was the fifth straight month in which the index remained above its benchmark level of 100.
Despite falling short of last year's levels, home sales in recent months have benefited from a more buyer-friendly market as inventory makes headway and price growth moderates.
"Housing supply for existing homes was up in September 6 percent from a year ago, which is preventing prices from rising at the accelerated clip seen earlier this year," said NAR Chief Economist Lawrence Yun. "Additionally, the current spectacularly low mortgage rates should help more buyers reach the market."
Despite those improvements, the market still remains challenging for some home shoppers, particularly those in a lower income bracket. According to NAR, 15 percent of Realtors who reported not closing a sale in September said their clients were unable to secure financing as tight credit conditions lock out all but the most pristine borrowers.
With the recent finalization of a risk retention rule for the secondary market and the Federal Housing Finance Agency signaling its intent to make credit available to more Americans, the association expects stringent lending requirements will become less of a concern.
Pending sales figures were mixed around the country. According to NAR, contract signings in the Northeast were up 1.2 percent to an index value of 87.5 in September, while signings in the South rose 1.4 percent to 118.5.
Meanwhile, the Pending Home Sales Index for the Midwest was down 1.2 percent to 101.2, while the index for the West slipped 0.8 percent to 101.3.