Pending home sales increased 0.9% to an index reading of 112.6 in May, after a revised 2.7% increase to 111.6 in April, according to a report released Monday by the National Association of Realtors.
The index is at its highest level since it hit 113.7 in April 2006.
The April increase was first reported as 3.4% to 112.4.
Economists polled by Thomson Reuters predicted the index would be up 1.2%
An index of 100 is equal to the average level of contract activity during 2001.
Year-over-year the pending homes sales index increased 10.4% from last May, when the index was 101.9.
Regionally, pending sales were mixed. The Northeast saw a 6.3% gain to 93.9, while sales rose 2.2% in the West to 104.5. In the South, sales fell 0.8% to 127.8, and sales decreased 0.6% to 111.4 in the Midwest.
"The steady pace of solid job creation seen now for over a year has given the housing market a boost this spring," NAR Chief Economist Lawrence Yun said. "It's very encouraging to now see a broad based recovery with all four major regions showing solid gains from a year ago and new home sales also coming alive."
Prices have risen to "unhealthy and unsustainable" levels as supply has remained at last year's levels despite sales increases, Yun said.
"Housing affordability remains a pressing issue with home-price growth increasing around four times the pace of wages," adds Yun. "Without meaningful gains in new and existing supply, there's no question the goalpost will move further away for many renters wanting to become homeowners."
