Pending home sales rise more than expected

WASHINGTON Wed Feb 27, 2013 10:03am EST

A ''for sale'' sign is seen on a fence at a lot of a former business site in Milwaukee November 2, 2012. REUTERS/Darren Hauck

A ''for sale'' sign is seen on a fence at a lot of a former business site in Milwaukee November 2, 2012.

Credit: Reuters/Darren Hauck

WASHINGTON (Reuters) - Contracts to buy previously owned U.S. homes rose more than expected in January, data from an industry group showed, a sign the housing recovery is gaining steam.

The National Association of Realtors said on Wednesday its Pending Home Sales Index, based on contracts signed last month, rose 4.5 percent to 105.9.

That was its highest level since April 2010, when it spiked just before the expiration of tax credits aimed to prop up the country's collapsed housing market.

Economists polled by Reuters had expected signed contracts, which usually become sales after a month or two, to rise 1.5 percent last month.

America's housing market has been depressed since a debt-fueled housing bubble burst in 2006, helping trigger the 2007-09 recession.

But the housing sector appeared to bottom out last year when home building contributed to economic growth for the first time since 2005. A shrinking stock of homes on the market and steady gains in hiring throughout the economy are seen fueling a further rebound this year.

(Reporting by Jason Lange; Editing by Andrea Ricci)

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