The National Association of Realtors reported that pending home sales rose 7.4% from July to August to 94.3 from a revised 87.0 July reading. This is a bit of surprising news for the battered U.S. housing market.

Wall Street economists surveyed by Thomson/IFR had predicted the index would fall to 84.9.

Home funding giants Fannie Mae and Freddie Mac, lending giants and largest buyers of U.S. mortgage bonds, were taken under government control on September 7.

Lawrence Yun, NAR’s chief economist, said it is unclear how contract activity will be disrupted by the crisis on Wall St, “but we’re hopeful most of the increase will translate into closed existing-home sales.”

Pending home sales improved across all regions in August: up 18.4 percent in the West, 8.4 percent in the Northeast, 3.6 percent in the Midwest and 2.3 percent in the South. Pending home sales show surprise rise.

The National Association of Realtors says pending home sales increased 7.4% from July to August; highest since June 2007.

The index, which sunk to a record low of 83 in March, stood at 85.8 in August 2007.