Pending home sales surged 8.2% to an index reading of 88.8 in May, according to a report released Wednesday by the National Association of Realtors.

Economists polled by Thomson Reuters predicted a 3.8% increase.

The April index was upwardly revised to 82.1 from 81.9.

“Absorption of inventory is the key to price improvement, and this solid gain in contract signings implies that home values in many localities are or will soon be stabilizing as inventories get absorbed at a faster pace,” said NAR chief economist Lawrence Yun.

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