Pending home sales grew 0.4% to an index reading of 97.8 in April, after an unrevised 3.4% gain to 97.4 in March, according to a report released Thursday by the National Association of Realtors.
The increase in the index was the second after eight months of decline, NAR said.
Economists polled by Thomson Reuters predicted that the index would be up 1.0%
An index of 100 is equal to the average level of contract activity during 2001.
Year-over-year the pending homes sales index is off 9.2% from last April, when the index was 107.7.
Regionally, pending sales were mixed. The Northeast saw a 0.6% gain to 79.3, while sales grew 5.0% in the Midwest to 99.2. In the South, sales fell 0.6% to 111.9, and sales slipped 2.9% to 88.4 in the West.
"Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective home buyers' confidence," NAR Chief Economist Lawrence Yun said. "An uptrend in closed sales is expected, although some months will encounter a modest setback."
With 30-year fixed-rate mortgage rates expected to rise, Yun said, "The extent to which higher mortgage interest rates will impact housing affordability and sales depends on income growth, ongoing improvement in the labor market and any change to mortgage underwriting conditions."
