Contracts to buy previously owned homes increased in May, the National Association of Realtors said on Thursday.
The NAR's pending home sales index rose to a reading of 105.4, up 1.1% from the prior month. Economists polled by Reuters had forecast pending home sales would rise 1.0%.
April's index was unrevised at 104.3.
Pending home contracts are seen as a forward-looking indicator of the health of the housing market because they become sales one to two months later.
Compared to one year ago, pending home sales were down 0.7%, marking the 17th straight month of annual decreases.