On a year-over-year basis, pending home sales were up 12.5%, beating expectations for an 8.3% rise.
Pending home sales climbed to the highest level since late 2006, according to NAR.
"Even with limited choices, it appears some of the rise in contract signings could be from buyers wanting to take advantage of current affordability conditions before mortgage interest rates move higher," Lawrence Yun, NAR chief economist said in a press release.
"This implies a continuation of double-digit price increases from a year earlier, with a strong push from pent-up demand."
A regional breakdown showed that pending home sales were up 16% on the month, but 1% on the year in the West. In the Midwest, the index was up 10.2% on the month and 22.2% on the year. In the Northeast, the index was up 14.3% on the year, but flat on the month. And in the South the index was up 2.8% on the month, and 12.3% on the year.
April's numbers were however revised down. Pending home sales were up 12.9% on the year, but down 0.5% on the month. This compares with an initial reading of 13.9% and 0.3% rise.
Investors watch this number because it is considered a leading indicator of the housing market.
This looks at all homes where a contract has been signed but the sale is not complete.
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