More consumers signed contracts to purchase existing homes in July as pending home sales jumped by more than 5% from a month earlier.

According to the National Association of Realtors, or NAR, its seasonally adjusted index for pending home sales rose 5.2% to a reading of 79.4 points from a month earlier. Sales in the West led the increase with a 12% growth, while sales in the Northeast rose by more than 6%. The number of pending home sales in the Midwest and the South, on the other hand, expanded by 4% and 1%, respectively.

Despite the increase, however, the figure is said to be 19% lower as compared from a year ago. Industry experts said the latest figure indicated that demand for residential real estate remains weak. Potential buyers are reportedly postponing their plans to purchase homes because of the high unemployment rate and the sluggish economy. They fear that home prices might decline again, which is something most analysts are expecting. Tight lending standards were also blamed for the low housing demand as many buyers are having a hard time qualifying for loans to purchase homes.

Meanwhile, NAR chief economist Lawrence Yun said it could take a long while before the housing market fully recovers. “The recovery looks to be a long process. For those who bought at or near the peak several years ago, particularly in markets experiencing big bubbles, it may take over a decade to fully recover lost equity,” he added.

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