Pending home sales grew by 1.5% in the month of September according to the National Association of Realtors (NAR).
The measure of the housing market was projected by economists to grow 1.0% in September from the month before.
The jump brought the pending sales of singe family homes, condos and co-ops to their fifth-highest level of the last year according to the NAR.
Chief economist for the NAR, Lawrence Yun, said that demand for homes is staying high, with increasing wages and a tight labour market helping to support buyer interest.
“Buyer demand is holding up impressively well this fall with Realtors reporting much stronger foot traffic compared to a year ago,” said Yun in the release.
On the other hand, said Yun, the supply of homes on the market is making the house search for the increased number of buyers particularly difficult.
“The one major predicament in the housing market is without a doubt the painfully low levels of housing inventory in much of the country,” said Yun. “It’s leading to home prices outpacing wages, properties selling a lot quicker than a year ago and the home search for many prospective buyers being highly competitive and drawn out because of a shortage of listings at affordable prices.
The September report represents a sharp turnaround in the pending sales measure from the previous month. In August, pending sales fell 2.4%, declining by much more than the expected flat reading.
After the report for August, the NAR said the slowing number of homes under contract showed the “housing recovery could stall.”