Contracts to buy previously owned homes jumped in February by the most since July 2010, according to figures released Wednesday by the National Association of Realtors in Washington.
The pending home sales index rose 5.5% (the forecast was for a 2.5% increase) after declining 2.8% the prior month. The index fell 2.4% from February 2016 on an unadjusted basis.
The increase shows the housing market was gathering momentum as warmer weather in February helped bring forward the start of the busy spring sales season. Buyers also hastened their entry into the market amid expectations of higher borrowing costs. While strong job creation and rising stock values remain supportive for residential sales, lean inventories are keeping asking prices elevated.
"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," Lawrence Yun, NAR's chief economist, said in a statement.
"The country's healthy labor market is translating to greater job security, but affordability is not improving because home prices in some areas are still outpacing incomes by three times or more because of tight supply."
Contract signings increased 11.4% in the Midwest, 4.3% in the South, 3.4% in the Northeast and 3.1% in the West.
The seasonally adjusted pending sales index rose to 112.3, which was also the second-highest level since 2006. Yun projects 5.57 million previously owned homes will be sold this year, up 2.3% from 2016, which was the strongest in a decade.
