Pending sales of existing U.S. homes fell more than expected in December, industry data showed on Wednesday, pointing to a moderation in home sales after recent hefty gains.

The National Association of Realtors' Pending Home Sales Index, based on contracts signed in December, dropped 3.5 percent to 96.6 after surging to a 1-1/2 year high the prior month.

Economists polled by Reuters had expected pending sales to fall 1.0 percent. Pending sales lead existing home sales by a month or two. In the 12 months to December, pending contracts were up 5.6 percent.

A recovery is starting to emerge in the housing market and home resales have risen for three straight months.

(Reporting by Lucia Mutikani; Editing by Chizu Nomiyama)