Pending home sales rose in July to the highest level in more than two years as the housing market continues showing sustained signs of recovery.
The sales index, a forward-looking indicator based on contract signings, was up 2.4 percent to 101.7 last month, its highest level since April 2010, shortly before the expiration of a home buyer tax credit, the National Association of Realtors said Wednesday.
The July figure is up 12.4 percent above the July 2011 level of 90.5.
"While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity," said Lawrence Yun, the NAR chief economist.
The data reflect contracts but not closings.
Limited inventory is constraining market activity, especially in the West, which is dealing with an "acute inventory shortage," Yun said.
Still, the other three regions experienced improvement last month.
The Northeast saw pending sales rise 0.5 percent to 77.0, 13.4 percent higher than a year ago, while the Midwest had a 3.4 percent improvement to 97.4, 20.2 percent above July 2011.
Pending home sales in the South rose 5.2 percent to 111.7, 15.6 percent above a year ago.
In the West the index slipped 1.7 percent in July to 109.9 but is 1.3 percent higher than July 2011.
Existing-home sales are projected to rise 8 to 9 percent in 2012, followed by another 7 to 8 percent gain in 2013.
Home prices are expected to increase 10 percent cumulatively over the next two years.
"Falling visible and shadow inventories point toward continuing price gains," Yun said. "Expected gains in housing starts of 25 to 30 percent this year, and nearly 50 percent in 2013, are insufficient to meet the growing housing demand."
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