A forward looking indicator of existing home sales rose 6.7% in April from the previous month, according to the National Association of Realtors. NAR's Pending Home Sales Index hit 90.3 in April, up from 84.6 in March to notch its third consecutive monthly gain.

The index tracks the signing of sales contracts even though some deals do not make it to closing. NAR noted that mortgage processing times have increased due to appraisal issues, tighter underwriting, and lender approvals on short sales. The trade group is forecasting that existing home sales will jump to a 5.5 million seasonally adjusted annual rate in the fourth quarter, a 19% gain from 1Q.

NAR cites the $8,000 first-time homebuyers tax credit for attracting more buyers. "There is going to be a crush of people in October and November," trying to take advantage of the tax credit before it expires November 30, said NAR spokesman Walter Maloney. NAR's economic forecast shows that home sales hit bottom in the first quarter at a 4.58 million seasonally adjusted annual rate and should end the second quarter at a 4.72 million rate.

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