US pending home sales rebound in February

US pending home sales jumped to a seven-month high in February after falling in January, and remained above the level a year ago, the National Association of Realtors said Monday.

The NAR's pending home sales index rose 3.5 percent month-over-month to the highest since July, led by a large increase in the Midwest and more modest gains in the South and West. The Northeast was the only region where sales declined.

February pending home sales data, based on contract signings that suggest future sales, was much stronger than the 1.1 percent rise analysts had expected after a poor showing in January blamed in part on severe winter weather.

"The large rebound suggests that last month's downturn was not the beginning of a protracted slump in housing activity, but rather just monthly noise," said Barclays analyst Jesse Hurwitz. "We continue to view the US housing market as in a mode of gradual improvement."

Year-over-year, pending sales were up 0.7 percent in February, the smallest annual gain in an 18-month streak of increases.

"After some volatility this winter, the latest data is encouraging in that a decent number of buyers signed contracts last month, lured by mortgage rates dipping to their lowest levels in nearly a year and a modest, seasonal uptick in inventory," Lawrence Yun, NAR chief economist, said in a statement.

According to NAR, sales of existing, or previously owned, homes -- the bulk of the US housing market -- are expected to reach about 5.38 million this year, up 2.4 percent from 2015.