The National Association of Realtors (NAR) announced Wednesday that pending home sales in April dropped 5.5 percent from March, the biggest decrease of the year.
The sales index measures how many people have signed contracts to purchase previously owned homes.
Although sales dropped in April after three months of gains, NAR said the housing market is significantly better than it was a year ago. In the Midwest, the index fell 0.3 percent, but is still 23 percent higher than April 2011. Only in the Northeast region did sales rise, according to the report.
Lawrence Yun, chief economist for the NAR, said in a release that the housing market is gradually improving, despite losses in April.
"Housing market activity has clearly broken out at notably higher levels and is on track to see the best performance since 2007," he said. "All of the major housing market indicators are expected to trend gradually up, but a new federal budget must be passed before the end of the year for the economy to continue to move forward.