WASHINGTON - An index that tracks the number of signed contracts to buy U.S. homes rose to its highest level in nearly two years last month, the latest sign that the battered housing market is slowly improving.
The National Association of Realtors said Thursday that its index of sales agreements increased 4.1 percent last month to a reading of 101.4. That's the highest since April 2010, when buyers could qualify for a federal home-buying tax credit. A reading of 100 is considered healthy.
Contract signings typically indicate where the housing market is headed. There's a one- to two-month lag between a signed contract and a completed deal.
The figures "bode well for existing-home sales over the next couple of months," said Joseph LaVorgna, an economist at Deutsche Bank, said in a note to clients. "We believe housing has now entered recovery."
More signings are among recent evidence of a slight pickup in the housing market. New-home sales fell in March but have risen over the past year. Builders are also more confident. And some measures of home prices are stabilizing.
Even so, cancellations of sales contracts are running higher than normal, as many buyers struggle to obtain mortgages. That's made the pending home-sales figure a less reliable indicator.