WASHINGTON — Here's yet another sign that the housing market may be coming back.
Contracts to purchase previously owned U.S. homes matched a two-year high in May, fueling optimism the housing market is poised for a recovery.
The National Association of Realtors said on Wednesday its Pending Home Sales Index, based on contracts signed last month, rose 5.9 percent to 101.1. The index level matched the two-year high reached in March, while the gain was the largest since October 2011.
Before March, the last time pending home sales were as high was April 2010 when buyers were rushing to beat the deadline for a home-buyer tax credit, which was about to expire, the NAR said.
"The housing market is clearly superior this year compared with the past four years," Lawrence Yun, NAR chief economist said in a statement. "We're on track to see a 9 to 10 percent improvement in total sales for 2012."
Economists polled by Reuters had expected signed contracts, which lead home sales by a month or two, to rise 1.0 percent after a previously reported 5.5 percent drop in April.
Meanwhile, U.S. banks held fewer troubled mortgages in the first quarter of 2012, according to a report issued on Wednesday by the Office of the Comptroller of the Currency, as loans serviced by national banks performed better in the first three months of the year.
The number of foreclosures in process decreased from a year ago, edging down 1.8 percent from the previous quarter and by 8.1 percent from a year earlier.
However, the percentage of mortgages in the process of foreclosure at the end of the first quarter of 2012 increased, rising by 1.8 percent from the previous quarter and 2.3 percent from a year earlier.
(The housing market is showing signs of life, but is it time to buy or sell a home? Join us today for a live web chat with Stan Humphries, the chief economist for real estate website Zillow. You can sign up here to ask your questions during out web chat at noon ET.)
Reuters contributed to this report.
More money and business news:
- 8 things to do if you haven't planned for retirement
- Potential NBA star tries to patent his famed unibrow
- Women really can have it all if they toughen up
- Video: College football makes big bet on playoffs
- Sign up for our Business newsletter