US pending home sales rise to highest since 2010

WASHINGTON (AP) -- A measure of the number of Americans who signed contracts to buy homes rose in January from December to the highest level in more than 2 1/2 years. The increase suggests sales of previously occupied homes will continue rising in the coming months.

The National Association of Realtors said Wednesday that its seasonally adjusted index for pending home sales rose 4.5 percent last month to 105.9. That's the highest since April 2010, when a homebuyer's tax credit was about to expire.

There is generally a one- to two-month lag between a signed contract and a completed sale.

Pending home sales rose in all regions, but just barely ticked up in the West, where a limited supply of available homes is holding back sales.

The increase is the latest positive report for the housing market, which began recovering last year after a deep, six-year slump. Steady hiring and nearly record-low mortgage rates have encouraged more Americans to buy homes.

Sales of previously occupied homes ticked up in January after rising to their highest level in five years in 2012.

And new-home sales jumped 16 percent in January from the previous month to the highest level since July 2008, the Commerce Department said Tuesday.

Home prices, meanwhile, rose by the most in more than six years in the 12 months ending in December.

Steady price increases are also contributing to the housing recovery. They encourage more people to buy before prices rise further. Higher prices also build homeowners' wealth, which can spur more spending and economic growth.