Contracts to purchase previously owned homes rose for a second month in April, the National Association of Realtors said Thursday.
Economists said the increase is a sign the residential real estate market is stabilizing after a weak start to the year.
The pending home sales index climbed 0.4 percent after a 3.4 percent increase in March that was the first gain in nine months, the Realtors association said. The median projection in a Bloomberg survey of economists called for the April index to rise 1 percent.
Housing demand has cooled as higher prices and borrowing costs put ownership out of reach for some prospective buyers. While mortgage rates have been falling in recent weeks, an improving employment outlook and easier access to credit would provide an additional push for the industry, economists said.
"The housing market is getting better," Patrick Newport, an economist with IHS Global Insight in Lexington, Mass., said before the report. "Going forward we don't think it's going to be a drag, it's going to be a positive for growth."
Estimates in the Bloomberg survey of 36 economists ranged from a decline of 1.5 percent to an advance of 4.2 percent.
Purchases fell 9.4 percent from the previous year after a 7.5 percent decrease in the 12 months that ended in March, the association reported.
The pending sales index was 97.8 on a seasonally adjusted basis. A reading of 100 corresponds to the average level of contract activity in 2001, or "historically healthy" home-buying traffic, according to the Realtors association.
Pending home sales rose 5 percent in the Midwest and 0.6 percent in the Northeast. Contract signings declined 2.9 percent in the West and 0.6 percent in the South.
Economists consider pending sales a leading indicator because they track new purchase contracts. Previously owned home sales are tabulated when a contract closes, usually a month or two later.
"Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective homebuyers' confidence," National Association of Realtors chief economist Lawrence Yun said as the report was released.
Home sales have been slow to emerge from a slump early this year. New property sales posted their first gain in three months in April, climbing 6.4 percent to a 433,000 annualized rate, Commerce Department data showed last week.
Gains in home prices have started to cool as tight lending standards limit demand. The S&P/Case-Shiller index of property values in 20 cities climbed 12.4 percent in March from a year ago, the smallest 12-month gain since July, data this week showed.
Housing began to slow in the middle of 2013, with residential investment becoming a drag on the economy during the last two quarters, its worst six-month performance since the first half of 2009.
In Arkansas, home sales rose 8.2 percent in April from the same month a year ago, the Arkansas Realtors Association said Wednesday. The average home price fell 5.2 percent.
More than 2,400 homes were sold in the 43 counties that report to the association, up from about 2,200 in April 2013.
The average price of previously owned homes and new homes fell from $158,739 in 2013 to $150,426 in April.
Business on 05/30/2014