The rise points to healthy sales increases of previously occupied homes in the months ahead. There's generally a one- to two-month lag between a signed contract and a completed sale, and banks' tight mortgage standards are keeping some prospective buyers from making it to the settlement table.
Improved pending sales add to evidence of a steady housing recovery. Builders are more confident in sales and are starting construction on more homes. Home prices are rising on a consistent basis, which encourages more potential buyers to come off the sidelines and purchase homes. And more people may put their homes on the market if they gain confidence that they can sell at a good price.
The report is "another indicator suggesting that the recovery in housing has broadened and has sustained momentum," Michael Gapen, an economist at Barclays Capital, said in a note to clients.
Signed contracts jumped 15.6 percent in the Midwest and rose 5.5 percent in the South. But they fell 1.1 percent in the West and dipped 0.1 percent in the Northeast.
Hurricane Sandy lowered pending sales in the Northeast, the Realtors' group said. The West was hurt by low inventories of available homes.
Mortgage rates remained near record lows this week. The average rate on the 30-year loan was 3.32 percent, mortgage buyer Freddie Mac said, just above 3.31 percent last week, which was the lowest on records dating to 1971.
A big reason for the rebound in housing is that the excess supply of homes that built up before the housing crisis has finally thinned out. The number of previously occupied homes available for sale has fallen to a 10-year low. The inventory of new homes is also near the lowest level since 1963.
At the same time, more people are looking to buy or rent a home after living with relatives or friends during and immediately after the Great Recession.
Those trends are also pushing up home sales and construction. Sales of previously occupied homes are near five-year highs, excluding temporary spikes in 2009 and 2010 when a home-buyer tax credit boosted purchases.
Builders, meanwhile, are more optimistic that the recovery will endure. A measure of their confidence rose to the highest level in 61/2 years this month. And builders broke ground on new homes and apartments at the fastest pace in more than four years last month.