Pending home sales increased 5.5% to an index reading of 112.3 in February, after an unrevised 2.8% drop to 106.4 in January, according to a report released Wednesday by the National Association of Realtors.
An index of 100 is equal to the average level of contract activity during 2001.
The February reading is the highest since April 2015 (113.6) and the second highest since May 2006 (112.5), NAR said.
Year-over-year the pending homes sales index increased 2.6% from last February, when the index was 109.5.
Regionally, pending sales were higher. The Northeast saw a 3.4% increase to 102.1, while sales rose 11.4% to 110.8 in the Midwest. Sales grew 3.1% in the West to 97.5 and sales gained 4.3% in the South to 127.8.
"Buyers came back in force last month as a modest, seasonal uptick in listings were enough to fuel an increase in contract signings throughout the country," NAR Chief Economist Lawrence Yun said. "The stock market's continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year."
Economists polled by Thomson Reuters predicted the index would be up 2.0%