Pending home sales surged 2.4% to an index reading of 101.7 in July, it highest reading since April 2010, after an unrevised 1.4% decrease to 99.3 in June, according to a report released Wednesday by the National Association of Realtors.
Economists polled by Thomson Reuters predicted that the index would be up 1.0%.
Year-over-year the pending homes sales index is up 12.4% from last July, when the index was 90.5.
Regionally, pending sales mostly gained. The Northeast saw a 0.5% increase to 77.0, while sales rose 3.4% in the Midwest to 97.4. In the South, sales climbed 5.2% to 111.7, and sales fell 1.7% to 109.9 in the West.
"While the month-to-month movement has been uneven, more importantly we now have 15 consecutive months of year-over-year gains in contract activity," NAR Chief Economist Lawrence Yun.
Yun also noted low inventory levels have held back the market, especially the West, which faces "an acute inventory shortage."