Warmer weather and higher expectations failed to cause a meaningful surge in home sales.
Signed contracts to buy existing homes increased just 0.4 percent in April, according to a monthly report from the National Association of Realtors (NAR). The expectation had been for at least a 2 percent gain sequentially.
The Realtors' so-called pending home sales index is now 9.2 percent lower than April of 2013.
"Higher inventory levels are giving buyers more choices, and a slight decline in mortgage interest rates this spring is raising prospective homebuyers' confidence," said Lawrence Yun, chief economist for the NAR. "An uptrend in closed sales is expected, although some months will encounter a modest setback."
At this point, much of the spring appears to be a setback for the housing recovery. With rough weather blamed for very slow sales at the beginning of the year, April should have seen the benefit of pent-up demand. Signed contracts in April are a forward-looking indicator for closed sales in May and June. Closed sales in April did increase slightly, the first month-to-month rise of the year, but the numbers were still well below a year ago.
Higher mortgage rates have been blamed for weaker sales, but rates have actually been falling slightly, and Wednesday the average rate on the 30-year fixed conforming loan hit the lowest level in nearly a year, hovering just above 4 percent, according to Mortgage News Daily.
While cash continues to fuel an abnormally high share of sales, 32 percent of closed April sales according to the NAR, investors are slowing their purchases and leaving mortgage-dependent buyers to pick up the slack. First-time homebuyers are still struggling with down payments and debt requirements, while move-up buyers are faced with a still short supply of homes for sale.
Regionally, pending home sales in the Northeast increased 0.6 percent, but are 12.0 percent below a year ago. In the Midwest sales rose 5.0 percent, but are 6.9 percent below April 2013. Pending home sales in the South slipped 0.6 percent and are 6.4 percent below a year ago. In the West, sales declined 2.9 percent and are 15.0 percent below April 2013.
—By CNBC's Diana Olick.