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Pending Homes Sales Hit Two-Year High (Updated)

Pending home sales jump by 3.2% in July, reaching a two-year high.

(Stock prices updated.)

WASHINGTON (

TheStreet

) -- Pending sales of existing homes jumped 3.2% in July, a two-year high.

The National Association of Realtors said the number of contracts to buy previously owned homes rose for the sixth consecutive month. The index level of 97.6 beat economists' expectations of a 1.5% jump over last month's 3.6% increase.

Real Estate Buyers Are Back

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Buyers rushed to take advantage of a tax credit of up to $8,000 for first-time home buyers that expires on Nov. 30. Foreclosed homes are allowing these buyers to nab bargain-bin prices.

Pending home sales are considered a leading indicator because they track contract signings.

Despite the good news, shares of homebuilders gave up some earlier gains.

KB Home

(KBH) - Get Report

fell 0.7% to $18.08,

Lennar

TST Recommends

(LEN) - Get Report

dropped 0.4% to $15.08,

Toll Brothers

(TOL) - Get Report

declined 1% to $22.46 and

Pulte Homes

(PHM) - Get Report

dropped 1% to $12.61.

-- Reported by Jeanine Poggi in New York

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