U.S. pending home sales jump in December

An advertisement for two-family homes is seen outside an oceanside community in the Rockaway area of the Queens borough of New York, September 16, 2015. REUTERS/Shannon Stapleton

WASHINGTON (Reuters) - Contracts to buy previously owned U.S. homes rebounded in December following a drop a month earlier, the National Association of Realtors said on Monday.

The NAR said it pending home sales index, based on contracts signed last month, rose 1.6 percent to 109.0.

Analysts polled by Reuters had forecast a 1.0 percent increase in December. The December index was 0.3 percent higher than in the same month the year earlier.

“Pending sales rebounded last month as enough buyers fended off rising mortgage rates and alarmingly low inventory levels to sign a contract,” NAR chief economist Lawrence Yun said in a statement.

The Fed raised its benchmark interest rate, which has a knock-on effect of increasing mortgage rates, on Dec. 14.

Across the nation’s four regions, contracts in December increased in the West and South by 5.0 percent and 2.4 percent, respectively. In the Northeast they fell 1.6 percent while there was a 0.8 percent decline in the Midwest.

Reporting by Lindsay Dunsmuir; Editing by Andrea Ricci