Pending sales in the United States were up slightly in June, reversing a three-month slide in contract signings and suggesting that more home sales may be closed by the end of the summer.

The National Association of Realtors' Pending Home Sales Index rose to 110.2, up 1.5 percent from the upwardly revised figure of 108.6 in May. It was also a year-over-year increase of 0.5 percent, marking the first annual growth of pending sales since March.

Pending sales are defined as transactions where a contract has been signed but the sale has not yet been closed. A figure of 100 indicates average contract activity equal to that of 2001, which had annual sales of 5 to 5.5 million existing homes; this level of activity is considered normal for the current U.S. population. The index is based on a large national sample which represents about 20 percent of existing home transactions.

Lawrence Yun, chief economist at the National Association of Realtors, said he was pleased to see the increase in pending sales. However, he says buyers continue to be stymied by an inadequate supply of homes for sale, a problem which has driven up prices and competition in many markets.

"The first half of 2017 ended with a nearly identical number of contract signings as one year ago, even as the economy added 2.2 million net new jobs," said Yun. "Market conditions in many areas continue to be fast paced, with few properties to choose from, which is forcing buyers to act almost immediately on an available home that fits their criteria."

However, Yun also said buyers are facing less competition from investors, who made up only 13 percent of existing home sales in June – the lowest share of the year. Purchases made with cash accounted for just 18 percent of existing home sales, the lowest level since June 2009.

"It appears the ongoing run-up in price growth in many areas and less homes for sale at bargain prices are forcing some investors to step away from the market," said Yun. "Fewer investors paying in cash is good news, as it could mean a little less competition for the homes first-time buyers can afford. However, the home search will still likely be a strenuous undertaking in coming months because supply shortages in most areas are most severe at the lower end of the market."

Yun is predicting that existing home sales will reach about 5.56 million this year, which would be a 2.6 percent increase from 2016. He expects the national median home price to increase by about 5 percent. Sales were up 3.8 percent in 2016, while prices increased by 5.1 percent.

The Northeast and the South were the only geographic regions where pending sales were up from both the previous month and the previous year. The Pending Home Sales Index in the Northeast stood at 98, up 0.7 percent from May and 2.9 percent from June 2016. In the South, the index of 126 marked a 2.1 percent increase from the previous month and a 2.6 percent increase from the previous year.

The Pending Home Sales Index in the West climbed 2.9 percent from May to reach 101.5, but this figure also marked a year-over-year decrease of 1.1 percent. The index in the Midwest was down 0.5 percent from May and 3.4 percent from June 2016 to 104.