The number of homes that went under contract in July rose 5.2%, the National Association of Realtors reported Thursday, signaling that perhaps the pull-forward effect of the federal home-buyer tax credit was beginning to wane.

The NAR's Pending Home Sales Index rose 5.2 percent to 79.4 based on contracts signed in July, still 19.1% below July 2009 but up from a downwardly revised 75.5 in June (originally75.7). Analysts were expecting a decline of 1%.

Regionally, the Northeast rose 6.3% to 62.5 in July, 21.1% below July, 2009.The Midwest was up 4.1% to 66.7, 25.7% below last July. The South rose 1.2% to an index of 86.3, 15.6% below July, 2009. lower than a year ago. The West jumped 11.6% to 95.0, still 17.6 percent below the year before.

Lawrence Yun, NAR chief economist, predicted that home affordability could reach a "generational peak" in the second half due to record low mortgage rates. He cautioned, however, that a long slog remained.

"Home sales will remain soft in the months ahead, but improved affordability conditions should help with a recovery," he said. "But the recovery looks to be a long process. Home buyers over the past year got a great deal, and buyers for the balance of this year have an edge over sellers. 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."

Michael Rehaut, home building analyst at JP Morgan, was buoyed by the report. "We believe July, which more than reverses June¹s 3% decline following May¹s large 30% drop, is consistent with our view that homebuilder order trends have remained roughly stable following May¹s material drop in demand after the expiration of the tax credit," he wrote in a note to investors.