Today, the National Association of Realtors (NAR) released their Pending Home Sales Report for May showing that pending home sales improved notably with the seasonally adjusted national index climbing 5.9% since April while increasing 13.3% above the level seen in May 2011. Meanwhile, the NARs chief economist Lawrence Yun suggests that 2012 is shaping up to be a "superior" year with sales projected as being up 10% overall for the year. "The housing market is clearly superior this year compared with the past four years.  The latest increase in home contract signings marks 13 consecutive months of year-over-year gains ... Actual closings for existing-home sales have been notably higher since the beginning of the year and we’re on track to see a 9 to 10 percent improvement in total sales for 2012." The problem is though, the MBA Purchase Index is not currently capturing any significant rise in purchase contract activity which begs the question... how are the buyers that the NAR sees in the pending index financing their purchase? ... Cash? The following chart shows the seasonally adjusted national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (click for larger version).