New NAR report finds overall pending home sales improved for the second straight month in April, but not every region performed well.

In March, the National Association of Realtors’ Pending Home Sales Index, described as a forward-looking indicator based on contract signings, showed the first overall increase of potential sales in 2014. Like shirking off an anvil, positive news of the market and general buyer confidence was a relief to many in the industry, but a single month’s gains is not enough to start celebrating the end of the recovery.

New numbers from NAR’s PHSI, released Thursday, lend credence to a more sustainable trend. From March to April, the index increased a small, but significant 0.4 percent, bringing the final figure from 97.4 to 97.8. While April’s gains are a step in the right direction, the PHSI is still down year-to-year. Last April, the index sat more than 9 percent above its current spot.

Which Parts of the Country Are Doing Well?

The national PHSI was up, but the number is not completely indicative of how the separate markets are doing throughout the country:

• The PHSI in the Northeast increased 0.6 percent in April, bringing the total figure to 79.3 – still 12 percent below last year.
• The PHSI in the Midwest increased five percent in April, bringing the total figure to 99.2 – still 6.9 percent below last year.
• The PHSI in the South dipped 0.6 percent in April, bringing the total figure to 111.9 – still 6.4 percent below last year.
• The PHSI in the West dipped 2.9 percent in April, bringing the total figure to 88.4 percent – still 15 percent below last year.

How Sustainable Is Renewed Buyer Confidence?

The NAR PHSI bases its measurements off contracts that have been signed but the sale attached to it has yet to close. The number is a key indicator of how market confidence is shifting, but it’s hard to determine the sustainability of success when the market has been so historical tumultuous.

Lawrence Yun, NAR’s chief economist, sees the increases as a definite sign of better things to come, but warns that high mortgage rates could impact housing affordability and overall sales if income growth and improvement to the labor market is stifled. He adds that changes to mortgage underwriting conditions could also affect the volatility of the market.

Still, Yun showed confidence in his outlook.

“Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective home buyers’ confidence,” he says. “An uptrend in closed sales is expected, although some months will encounter a modest setback.”