Everybody loves a bargain, and would-be homeowners are no exception. Thanks to home shoppers looking for a deal, the National Association of Realtors’ pending home sales index increased 5.2 percentage points to 88.2 in April.

It represents the highest pending home sales index reading since October 2007, although the April figure does stand as a year-over-year drop of 13.3 percentage points.

The reason? Reasonable mortgage rates and dropping home sales prices. “Bargain hunters have entered the market en masse, especially in areas that have experienced double-digit price declines, but it’s unclear if they are investors or owner-occupants,” said Lawrence Yun, chief economist for the National Association of Realtors.  “Sharp price reductions are leading to a quicker discovery of price equilibrium points. “

The association derives its pending home sales index from existing-home sales contract activity. A sale is considered pending after a contract has been signed, but the closing has not happened.  An index of 100 is equal to the average level of contract activity during 2001, which was the first year to be examined.

Alison Rice is senior editor, online, for BUILDER magazine.