Pending Home Sales Soar 6.7 Percent to Reach 6-Year High

Signed contracts to buy previously owned homes rose to the highest level in six years. Rising interest rates may be causing some buyers who were on the fence to get in quickly before they are priced out.

The Pending Home Sales Index from the National Association of Realtors rose 6.7 percent in May from April, and is now up 12.1 percent from a year ago. A shortage of homes for sale has weighed on the market this year, even as demand increases. Contracts to buy newly built homes rose to a five-year high in May, according to the U.S. Census.

"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," said Lawrence Yun, chief economist for the Realtors.

"This implies a continuation of double-digit price increases from a year earlier, with a strong push from pent-up demand."

(Read More: Rising Mortgage Rates Cause 'Rush to ARMs')

The average rate on the 30-year fixed conforming mortgage is up about 100 basis points from the beginning of May to around 4.5 percent. The rate spiked the most in the past week, before these May contracts were signed.

Getty Images

A sale pending sign is posted in front of a home for sale in San Francisco, California.

Pending sales were strongest in the West, where prices jumped the highest.

(Read More:Million-Dollar Homes: Summertime Edition)

The index was unchanged in the Northeast in May month-to-month, but was 14.3 percent higher from a year ago. In the Midwest, sales jumped 10.2 percent monthly and were 22.2 percent higher than in May 2012. The South saw a 2.8 percent monthly gain and is 12.3 percent above a year ago. The index in the West rose 16 percent monthly but is just 1.1 percent higher than a year ago, due to limited inventory.

—By CNBC's Diana Olick. Follow her on Twitter @Diana_Olick or on Facebook at facebook.com/DianaOlickCNBC.

Questions? Comments? [e-mail]