Sales of homes in contract hit their highest level in more than five years last month, adding to signs of a strengthening market.
An index of pending home sales rose 5.2%, to 104.8, in October from a month earlier, the National Association of Realtors said Thursday.
Contract signings were up 13.2% from a year earlier and stood at their highest level since March 2007. Sales are usually finalized within a month or two of a contract's signing.
"We've had very good housing affordability conditions for quite some time, but we're seeing more impact now from steady job creation, and rising consumer confidence about home buying now that home prices have clearly turned positive," Lawrence Yun, the association's chief economist, said in a news release.
Activity varied regionally. Signings surged 15.6% in the Midwest and rose 5.5% in the South from September. Houses in contract slipped 0.1% from September in the Northeast, which was pummeled in October by Hurricane Sandy, while signings fell 1.1% in the West. All regions with the exception of the West saw double-digit increase from a year earlier.
"The Northeast saw some impact from Hurricane Sandy, but limited inventory in the West is keeping a lid on the market," Yun added.
Sales of previously owned homes rose 2.1% in October while the supply of homes for sale shrank to its lowest level in nearly a decade, the association announced on Nov. 19.