Pending home sales increased 1.3% to an index reading of 111.3 in July, after a revised 0.8% decline to 109.9 in June, according to a report released Wednesday by the National Association of Realtors.
Economists polled by Thomson Reuters predicted the index would be up 0.6%
The June index was first reported as up 0.2% to 111.0.
An index of 100 is equal to the average level of contract activity during 2001.
Year-over-year the pending homes sales index increased 1.4% from last July, when the index was 109.8.
Regionally, pending sales were mostly higher. The Northeast saw a 0.8% gain to 96.8, while sales fell 2.9% to 105.8 in the Midwest. Sales soared 7.3% in the West to 108.7 and sales grew 0.8% in the South to 123.9.
"Amidst tight inventory conditions that have lingered the entire summer, contract activity last month was able to pick up at least modestly in a majority of areas," NAR Chief Economist Lawrence Yun said. "More home shoppers having success is good news for the housing market heading into the fall, but buyers still have few choices and little time before deciding to make an offer on a home available for sale. There's little doubt there'd be more sales activity right now if there were more affordable listings on the market."
