Contracts to buy previously owned homes rose to their highest level in more than two years in July, an industry group reported Wednesday, providing further evidence the U.S. housing market recovery was continuing. The National Association of Realtors (NAR) said its pending home sales index, based on contracts signed last month, increased 2.4 percent to 101.7 from the June reading of 99.3. The July figure is the highest level since April 2010. A reading of 100 is considered healthy. The index now is 12.4 percent higher than July 2011, and it hit bottom at 75.88 in June 2010. Contract signings typically indicate the direction of the housing market. There usually is a one- or two-month lag between a signed contract and a completed deal. The increase in pending home sales is the latest sign that home sales are finally rebounding five years after the housing market crashed. Last week, the NAR said completed sales of previously occupied homes jumped 10 percent in July from the same month a year earlier. Sales of newly built homes were up 25 percent in the same 12-month period. Moreover, builder confidence rose this month to its highest level in five years, and mortgage rates are near record lows. Home prices also have begun to rise consistently, which could boost sales in the coming months. However, the housing market is far from a full recovery. Some economists forecast that sales of previously occupied homes will rise 8 percent this year to about 4.6 million, which would be well below the 5.5 million-unit annual pace that is considered healthy.
