NEW YORK (MainStreet) — Housing inventory is at its highest level in nearly two years, and while pending home sales are gaining, they are still 2.1% below last year's level. With interest rates still low, and potential homeowners making their move before prices rise even more -- it all adds up to a buyer's market in real estate.

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The National Association of Realtors (NAR) reports pending home sales have now risen in four of the last five months in all major regions of the nation – except the Midwest, which experienced a slight dip.

"Interest rates are lower than they were a year ago, price growth continues to moderate and total housing inventory is at its highest level since August 2012," says Lawrence Yun, NAR chief economist. "The increase in the number of new and existing homes for sale is creating less competition and is giving prospective buyers more time to review their options before submitting an offer."

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Yun also believes steady job growth is boosting household finances and giving families added confidence to enter the market.

The Pending Home Sales Index (PHSI) represents contracts that have been signed but a sale that hasn't yet closed and amounts to about 20% of existing-home transactions. An index of 100 is equal to an average level of contract activity. In the Northeast, the index rose 6.2% to 89.2 in July, and is 8.3% above a year ago, but still holding to a below-average level of sales. In the Midwest, the index marginally fell 0.4% to 104.6 in July, and is 6.4% below July 2013.

Pending home sales in the South increased 4.2% to an index of 119.0 in July – the most active housing market in the nation, but still 1.0% below a year ago. Meanwhile, in the West the PHSI rose 4.0% in July to 99.5, remaining 6.0% below July 2013.

Yun forecasts existing-homes sales to be down 2.1% this year to 4.98 million – but national median existing-home prices are projected to grow between 5 and 6% this year and another 4-5% in 2015.

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The Zillow Home Value Index mirrors the prediction, showing home price appreciation slowing. The index shows July home values gained 6.5% on a year-over-year basis.

--Written by Hal M. Bundrick for MainStreet