A sale pending sign is seen outside a home in...

A sale pending sign is seen outside a home in Los Angeles. The National Association of Realtors said Wednesday that its index of sales agreements for previously occupied homes rose 8.2 percent last month to 88.8. (Sept. 1, 2010) Credit: AP

The number of people who signed contracts to buy homes rose sharply in May. But the influx of spring buyers wasn't enough to signal a rebound in the struggling housing market.

The National Association of Realtors said yesterday its index of sales agreements for previously occupied homes rose 8.2 percent last month to 88.8. April saw a seven-month low of 82.1.

A reading of 100 is considered healthy by economists. The last time the index reached that level was in April 2010, the final month when buyers could qualify for a federal tax credit. Signings are now 17 percent above last June's reading of 75.9, the lowest figure since the housing market went bust nearly four years ago.

Contract signings are typically a reliable indicator of where the housing market is headed. That's because there's usually a one- to two-month lag between a sales contract and a completed deal. But the Realtors group says a growing number of buyers have canceled contracts ahead of closings after appraisals showed the homes were worth less than they bid.

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