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Today, the National Association of Realtors (NAR) released its Pending Home Sales Report for May. It showed that pending home sales improved notably, with the seasonally adjusted national index climbing 6.7% from April and increasing 12.1% above the level seen in May 2012. Meanwhile, NAR's Chief Economist Lawrence Yun suggested the spike in contract activity is likely the result of sidelined buyers now jumping to buy before interest rates, increasing for several weeks now, rise further:

Even with limited choices, it appears some of the rise in contract signings could be from buyers wanting to take advantage of current affordability conditions before mortgage interest rates move higher. ... This implies a continuation of double-digit price increases from a year earlier, with a strong push from pent-up demand.

The following chart shows the seasonally adjusted national pending home sales index, along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005.

Source: Pending Home Sales: May 2013