More people signed contracts to buy previously occupied U.S. homes in May, matching the fastest pace in two years, an industry group reported Wednesday, suggesting home sales will rise this summer and the modest housing recovery will continue. The National Association of Realtors (NAR) said its index of sales agreements increased to 101.1 last month from 95.5 in April. The result matched March's reading, which had been the highest since April 2010. A reading of 100 is considered healthy. The NAR index is 13.3 percent higher than it was a year ago. It hit a post-recession low of 75.88 in June 2010. Contract signings generally indicate the direction of the housing market, as there is a one- or two-month lag between a signed contract and a completed deal. Recent data suggest the housing market has begun to recover more than five years after its collapse. Home prices rose last month, sales of new and previously owned homes are higher than a year ago, mortgage rates are at record lows, and builder confidence is rising. However, the broader economy has weakened in recent months. Hiring has slowed sharply, and some economists worry the weak job market could limit home sales just as the housing market is showing signs of recovery.
