It's not much in the way of a sign that we're climbing up from the well we've fallen into but at this point, like a starving man, we'll grasp at any morsel at all of good news on the housing front.

Sales of existing homes increased much more than analysts thought in April - a possible sign that the rash of foreclosures have enticed bargain hunters back into the market:

The National Association of Realtors Pending Home Sales Index, based on contracts signed in April and seen as a key barometer of future housing activity, increased 6.3 percent to 88.2 from an unrevised 83.0 in March. Despite the uptick, sales were 13.1 percent lower than a year ago.

"Bargain hunters have entered the market en masse, especially in areas that have seen double-digit price declines," said the association's chief economist, Lawrence Yun. Regions of the country that have seen sharp price declines, such as the West, are now seeing a sales recovery, he added.

Economists polled by Reuters before the report were expecting pending home sales to decline 0.5 percent.

"We are seeing an acceleration in foreclosures. As foreclosures have taken off, they put pressure on prices. Banks have become more aggressive with sales on homes they have foreclosed," said Christopher Low, chief economist at FTN Financial in New York.

Low said the pickup in pending home sales could be a sign that the housing market could soon be stabilizing.

"Sales will stabilize in the next few months and that will set the stage for inventories turning to normal sometime next year and maybe even for prices to appreciate a bit," he said. "For now, prices will continue to fall. There is still an inventory overhang that will take 18 months to work through. The end game of the housing bust is near."