The National Association of Realtors' leading indicator of future home sales unexpectedly jumped 10.4% in October after falling 4.6% the previous month.
The Realtors reported Wednesday that its pending sales index hit a reading of 93.3 -- the highest mark since last December.
The trade group hopes this sudden surge in contract signings means buyers are finally returning to the market thanks to continued low mortgage rates and affordable home prices.
"We hope this indicates more buyers are taking advantage of the excellent affordability conditions," NAR chief economist Lawrence Yun said.
The PSI is based on contracts signed in October, but the actual sales might not close for another month or two. (An index reading of 100 is equal to the average level of contract activity during 2001, its first year of existence, and the first of five consecutive record years for existing-home sales. A reading of 100 coincides with a level that is historically healthy.)
The Realtors know a lot of contracts get cancelled. Recently 30% of pending sales failed in one month due to credit scores, appraisals, home inspections and other issues.
Meanwhile, NAR economists are forecasting that existing home sales will rise 5.1% in 2012 to 5.2 million.
They also expect median home prices to rise 1.2% next year to $168,200.
