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Pending Home Sales Rise to Highest Level in 9 Years

WASHINGTON — Contracts to buy existing homes in the United States rose in May to their highest level in just over nine years, a further boost to the housing market and the broader economic outlook.

The National Association of Realtors said on Monday that its pending home sales index, based on contracts signed last month, increased 0.9 percent to 112.6, the highest level since April 2006. Contracts have now increased for five straight months.

Pending home contracts become sales after a month or two, and the increase last month pointed to further gains in home resales after they hit a five-and-a-half-year high in May.

“The recent trend suggests that we will see continued strength in resales in the months ahead. However, the current low inventory levels, which are placing upward pressure on home prices, remain a downside risk,” said Derek Lindsey, an analyst at BNP Paribas in New York.

The housing market recovery is back on track after being hit hard by bad weather at the start of the year.

It is being bolstered by a tightening labor market, which is helping to spur some pickup in wage growth.

The pending home sales report added to robust building permits, housing starts, new-home sales and home resales data in painting a bullish picture of the housing market.

It also joined strong retail sales, consumer sentiment and employment data in suggesting a building up of momentum in the economy after a mild contraction in output in the first quarter.

Pending home sales increased 10.4 percent from a year ago.

Contracts increased 6.3 percent in the Northeast and rose 2.2 percent in the West. They slipped 0.8 percent in the South and dipped 0.6 percent in the Midwest.

A version of this article appears in print on  , Section B, Page 5 of the New York edition with the headline: In Sign of Strength for Economy, Pending Home Sales Hit Nine-Year High. Order Reprints | Today’s Paper | Subscribe

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