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 group reported Wednesday that its pending sales index hit a reading of 93.3 — the highest mark since last December.
The Realtors hope this sudden surge in contract signings means buyers are finally returning to the market thanks to continued low mortgage rates and affordable home prices.
The PSI is based on contracts signed in October, but the actual sales might not close for another month or two. (A reading of 100 coincides with a level that is historically healthy.)
The Realtors know many contracts get cancelled. Recently 30% of pending sales failed in one month because of credit scores, appraisals and other issues. Meanwhile, the group's economists are forecasting that existing home sales will rise 5.1% in 2012, to 5.2 million.
