Pending home sales surged 6.1% to an index reading of 103.9 in May, after a revised 0.5% gain to 97.9 in April, according to a report released Thursday by the National Association of Realtors.
The April reading was first reported as a 0.4% increase to 97.8.
Economists polled by Thomson Reuters predicted that the index would be up 1.5%
An index of 100 is equal to the average level of contract activity during 2001.
Year-over-year the pending homes sales index is off 5.2% from last May, when the index was 109.6.
Regionally, pending sales were up. The Northeast saw an 8.8% gain to 86.3, while sales grew 6.3% in the Midwest to 105.4. In the South, sales rose 4.4% to 117.0, and sales gained 7.6% to 95.4 in the West.
"Sales should exceed an annual pace of five million homes in some of the upcoming months behind favorable mortgage rates, more inventory and improved job creation," NAR Chief Economist Lawrence Yun said. "However, second-half sales growth won't be enough to compensate for the sluggish first quarter and will likely fall below last year's total."
Affordability remains problematic, Yun said, especially for first-time home buyers.
