WASHINGTON: Signed contracts for US home resales rose to a nearly two-year high in January, an industry group said on Monday, further evidence of a budding recovery in the housing market.
The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in January, increased 2 percent to 97.0 -- the highest reading since April 2010.
December's reading was revised down to 95.1 from a previously reported 96.6.
"Given more favorable housing market conditions, the trend in contract activity implies we are on track for a more meaningful sales gain this year," said NAR chief economist, Lawrence Yun.
Economists polled by Reuters had expected signed contracts, which lead existing home sales by a month or two, to rebound 1.0 percent after a previously reported 3.5 percent fall. Contracts signed were up 8.0 percent in the 12 months to January.
A nascent recovery is under way in the housing market, with the supply of both new and previously owned homes on the market being whittled down in recent months.
But with the foreclosure tide yet to recede and continuing to depress prices, recovery will be a long, drawn-out affair.
"With a sustained downtrend in unsold inventory, this would bring about a broad price stabilization or even modest national price growth, of course with local variations," said Yun.
Pending home sales rose strongly in the Northeast and South, but fell in the Midwest and West.
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