US pending home sales rise more than expected in August

US pending home sales rose more than expected in August, according to data released by the National Association of Realtors on Thursday.

The NAR's monthly index increased 1.6% to 107.3, beating expectations for a 0.9% jump. On the year, the index was up 2.5%.

Chief economist Lawrence Yun said: "It is very encouraging that buyers are responding to exceptionally low interest rates.

"The notable sales slump in the West region over recent years appears to be over. Rising demand will reaccelerate home price appreciation in the absence of more supply."

Yun added that with interest rates expected to remain low, home sales are forecast to rise in the coming months and into 2020.

"Unfortunately, so far in 2019, new home construction is down 2.0%. The hope is that housing starts quickly move into higher gear to meet the higher demand. Moreover, broader economic growth will strengthen from increased housing activity."

The pending home sales index for the Northeast rose 1.4% to 94.3 in August, while the index for the Midwest was 0.6% higher at 101.7. The gauge for the South was 1.4% firmer at 124.4 and the index for the West grew 3.1% to 96.4.