Pending home sales rose again in May, marking the fourth consecutive month of increase and the longest stretch of monthly gains since late 2004. The National Association of Realtors' (NAR) Pending Home Sale Index measures the volume of contracts signed in May as an indicator of home sales in coming months. This index rose 10 bps since April and is 6.7% higher than in May 2008. Pending home sales in the Northeast rose 3.1% in May and are 6.8% above the year-ago level there. The Midwest saw pending home sales slip 1.3% but still sits 11.4% above the year-ago level. Meanwhile, pending sales declined 1.7%  in the South and rose 2.2% in the West. The gains in pending sales since last month, especially in the Northeast and in the West, indicate existing home sales should continue to trend up through the end of the year, NAR says. NAR's housing affordability index remains at historic highs, despite a slight fall from April, which recorded the highest level of affordability in the index's 30-year plus history. Combined with the first-time home-buyer tax credit, the high affordability should bring new buyers onto the market in coming reports, which in turn should help the housing industry. "Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade," says Lawrence Yun, NAR's chief economist, in a statement today. Write to Diana Golobay.