The residential housing market is in the midst of recovery, but there are still some bumps in the road that may be affecting the mortgage and title insurance industries.

The total level of pending home sales was at 102.7 in June, 1.1 percent lower than May's level of 103.8, according to the Pending Home Sales Index from the National Association of Realtors. The latest measurement also slid 7.3 percent from the same month in 2013, when it was at a level of 110.8. Even with these declines, the figure was above the benchmark of 100, noting that contract activity was above-average.

"Activity is notably higher than earlier this year as prices have moderated and inventory levels have improved," said Lawrence Yun, chief economist at NAR. "However, supply shortages still exist in parts of the country, wages are flat, and tight credit conditions are deterring a higher number of potential buyers from fully taking advantage of lower interest rates."

There may be a boost in sales as the year continues, but total transactions may not meet the levels experienced in 2013. The report noted that overall existing-home sales should reach 4.95 million units in 2014, 2.8 percent lower than the 5.1 million units sold last year.

Other industry aspects improving
Even with some lagging in home sales, there are other parts of the housing industry that are positive. One of these is the new construction market. According to a report from the National Association of Home Builders, the overall level of builder confidence entered positive territory in July, as it jumped to 53, four points higher than June's level. Due to the figure surpassing 50, this meant that there were more industry members who felt that the residential construction market was heading in a positive direction.

"An improving job market goes hand-in-hand with a rise in builder confidence," said David Crowe, chief economist at NAHB. "As employment increases and those with jobs feel more secure about their own economic situation, they are more likely to feel comfortable about buying a home."

Two of the three subindices were in positive territory during July, as well. The report showed that future sales expectations spiked during the month, reaching 64. One month earlier, the level was 58. Current sales conditions improved to 57, four points higher than the previous month. Prospective buyers traffic was at 39, still well off of the threshold.