The Pending Home Sales Index jumped 5.5% in February, its best reading since last April and the second-best reading since May 2006, the National Association of Realtors said Wednesday.
Pending home sales reflect contract signings and are a forward-looking gauge to what actual existing-home sales will be in the next month or two.
"The stock market's continued rise and steady hiring in most markets is spurring significant interest in buying, as well as the expectation from some households that delaying their home search may mean paying higher interest rates later this year," said NAR Chief Economist Lawrence Yun in a statement. "Last month being the warmest February in decades also played a role in kick-starting prospective buyers' house hunt."
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The Federal Reserve on March 15 raised interest rates as expected, but chose not to signal faster rate hikes going forward. Treasury yields have fallen sharply on that news, pushing mortgage rates lower as well.
Pending home sales shot up 11.4% in the Midwest, while climbing 4.3% in the South, 3.4% in the Northeast and 3.1% in the West.
Shares of homebuilders D.R. Horton (DHI), Lennar, KB Home (KBH), Toll Bros. (TOL) and Pulte Group (PHM) were mostly lower just after the 10 a.m. ET pending home sales release.
D.R. Horton, down 0.1% in morning trade on the stock market today, is just below a cup-with-handle buy point. Lennar and KB Home, which reported better-than-expected earnings last week, fell 0.1% and rose 0.3%, respectively. Both are extended from recent breakouts. So are Toll Bros. and Pulte Group, which both dipped Wednesday morning.
Last week NAR reported existing-home sales fell in February, but from January's cycle high. New-home sales climbed last month, the Commerce Department said last week.
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