The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in April, rose 6.7 percent for that month from March, well above economists’ average forecast of a 0.5 percent rise, according to a Reuters poll.
Shares of home builders increased after the data, as the Dow Jones U.S. Home Construction index .DJUSHB added 1.6 percent and the SPDR S&P Homebuilders ETF (XHB.P) gained 2 percent.
“This is our third monthly increase, and it really supports the bullish case,” said Jim Awad, managing director at Zephyr Management in New York.
“It is going to be incredibly good for the markets today, and it looks like what’s going to happen is that by the time it’s clear we’re in a recovery, the stock market will be fully valued.”
The Dow Jones industrial average .DJI gained 15.83 points, or 0.18 percent, to 8,737.27. The Standard & Poor’s 500 Index .SPX rose 1.04 points, or 0.11 percent, to 943.91. The Nasdaq Composite Index .IXIC added 5.02 points, or 0.27 percent, to 1,833.70.