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Contract signings to purchase previously owned U.S. homes surged in May by the most on record as mortgage rates fell and some states began to reopen from coronavirus lockdowns.

The National Association of Realtors' index of pending home sales increased 44.3% to a three-month high of 99.6, after falling in April to the lowest level in records back to January 2001.

Even with the outsize advance, the index is below the pre-pandemic high of 111.4, reached in February.

The pending home sales index plunged 21.8% from March to April to a level of 69.

The advance in May adds to signs the residential real estate market is snapping back faster than most of the economy after the typically robust spring home-selling season was interrupted amid the shutdowns. Mortgage rates have dropped to the lowest on record, helping to stabilize demand though the industry may be challenged by high unemployment and lingering health concerns.

Sales of both existing and new homes fell sharply in the spring as communities were locked down.

However, last week the government reported that sales of new homes rose a surprisingly strong 16.6% in May as major parts of the country reopened.

"The outlook has significantly improved," Lawrence Yun, the Realtors association's chief economist, said in a statement.

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The Realtors project existing home sales to reach 4.93 million units this year, up from a previous forecast of 4.77 million. Last year, there were more than 5.3 million previously owned homes sold.

An S&P homebuilders index advanced 1% in early trading Monday on the Realtors data.

Some government officials began easing their restrictions on business in May. With coronavirus cases increasing in states including Texas, California and Florida, some locations are putting a pause on lockdowns. Still, home loan applications are close to an 11-year high.

Pending home sales rebounded sharply in all U.S. regions, including a 56.2% monthly jump in the West and a 43.3% gain in the South.

Information for this article was contributed by Maeve Sheehey of Bloomberg News and by Matt Ott of The Associated Press.

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