Pending sales of previously owned U.S. homes unexpectedly rose in September to their highest level in nearly three years ahead of the expiration of a popular tax credit for first-time buyers, a survey showed on Monday.
The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in September, rose 6.1 percent 110.1 -- the highest level since December 2006. It was the eighth straight monthly rise in the index, the longest streak since the measurement started in 2001.
Analysts polled by Reuters had forecast pending home sales, which lead existing home sales by one to two months, to be flat in September after rising to 103.8 in August.
What we're witnessing is a rush of first-time buyers trying to beat the expiration of the tax credit at the end of this month, said NAR chief economist Lawrence Yun.
Home values will stabilize sooner rather than over-correcting. That, in turn, will mean wealth stabilization for the vast number of middle-class families and lay the foundation for a durable economic recovery.
The Pending Homes Sales Index surged a record 21.2 percent in September from the same period a year-ago.
(Reporting by Lucia Mutikani; Editing by Neil Stempleman)