Pending sales of U.S. homes rose by two percent in January from the previous month, according to the National Association of Realtors, beating expectations.

Economists polled by Bloomberg had forecast a 1 percent gain. It was the highest level since April 2010. December's pending home sales were down a revised 1.9 percent from November, a smaller drop than the 3.5 percent previously reported.

Pending sales, which are a leading indicator of the housing market, rose eight percent in January from a year earlier, NAR said.

Pending sales are calculated when a contract is signed, but before the deal closes, typically one or two months later. NAR's index measures around 20 percent of the country's transactions.

Given more favorable housing market conditions, the trend in contract activity implies we are on track for a more meaningful sales gain this year, Lawrence Yun, chief economist of NAR, said in a statement.

With a sustained downtrend in unsold inventory, this would bring about a broad price stabilization or even modest national price growth, of course with local variations.

In the Northeast, pending sales rose 7.6 percent compared to the previous month and 9.8 percent above January 2011. Midwest pending sales fell 3.8 percent month-over-month but rose 10.8 percent from the previous year.

Pending sales in the South increased 7.7 percent month-over-month and 10.5 percent from the prior year, while in the West, pending sales fell 4.4 percent month-over-month and were up 0.7 percent from 2011.

Movements in the index have been uneven, reflecting the headwinds of tight credit, but job gains, high affordability and rising rents are hopefully pushing the market into what appears to be a sustained housing recovery, Yun noted.

He said sales could rise by 15 percent if credit availability returned to normal.