The Pending Home Sales Index rose 3.3% to 105.9 in July from 102.5 in June — highest since August last year. The Pending Home Sales Index is a forward indicator based on contract signings.

The housing recovery seems to be gathering steam after a softer-than-expected spring selling season. The buyers seem to be back in the market with improvement in both the economy and employment and as interest rates remain low despite curtailing of bond buybacks by the Federal Reserve. Moreover, price growth continues to moderate after the rapid increases seen last year. The median home price increased 4.9% year over year in July.

A slew of positive data released this month raises hope that the housing market recovery might finally be back on track.

Housing starts surged to an 8-month high in July, growing 15.7% from the prior month to an annualized rate of 1.093 million units.

Building permits, a gauge of future construction, also bucked the previous trend. After declining in June, building permits grew 8.1% in July.

Sale of existing homes rose 2.4% in July, for the fourth consecutive month this year.

Homebuilder confidence data for August hit its highest level since January clearly indicating that builders are upbeat about their prospects for future sales.

New homes inventory for sale rose 4.1% to 205,000 units in July. This is a 6-month supply at the current sales pace — the highest so far this year — which suggests improvement in the supply picture.

The rising inventory, low mortgage rates, improving job market, and moderating home price gains is expected to give homebuyers the much-needed confidence to buy more homes; possibly resulting in higher home demand in the second half of the year.