The pending homes sales index jumped up 9.5% from last year in June, making 14 consecutive months of year over year gains, ending at 99.3.  An index of 100 is equal to the average level of contract activity in 2001, which was considered a historically healthy year for pending home sales.  The National Association of Realtors is urging lenders to release any bank owned properties to the market so that these numbers can continue to grow.  NAR Chief Economist Lawrence Yun said buyer interest “remains strong, but fewer home listings mean fewer contract signing opportunities. We’ve been seeing a steady decline in the level of housing inventory, which is most pronounced in the lower price ranges popular with first-time buyers and investors.”

Another factor that’s hindering inventory growth is that many homeowners who would like to sell are unable to because they are “underwater” on their mortgage — they owe more than their homes are worth.  As home prices rise, that’s expected to release pent-up seller demand. During the first three months of the year, data aggregator core logic estimates that rising home prices helped more than 700,000 homeowners regain equity in their homes, but 11.4 million borrowers still owed more than their homes were worth.

In its latest economic outlook , NAR projects that existing-home sales will grow 8.6 percent this year to 4.62 million, and by another 7.5 percent next year, to 4.97 million.  New-homes sales are on track for 30.6 percent growth this year, to 393,000, and NAR projects 59.3 percent growth in 2013, to 626,000.