The National Association of Realtors’ Pending Home Sales Index has risen for nine months in a row indicating that more Americans are signing contracts to buy homes. This is the first since the index’s inception in 2001 according to the trade group.

In October the National Association of Realtors recorded an unprecedented ninth consecutive month of increases in the number of signed contracts.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in October, jumped 3.7 percent to 114.1 from 110.0 in September, and is 31.8 percent above October 2008 when it was 86.6. The year over year increase is the biggest annual increase ever recorded for the index.

The index was at its highest level since March 2006 when it was 115.2.

NAR’s chief economist, Lawrence Yun, said home sales are experiencing a pendulum swing. “Keep in mind that housing had been underperforming over most of the past year. Based on the demographics of our growing population, existing-home sales should be in the range of 5.5 million to 6.0 million annually, but we were well below the 5-million mark before the home buyer tax credit stimulus,” he said. “This means the tax credit is helping unleash a pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future.

The big increase can be attributed to the tax credit which was scheduled to expire on Dec. 1, so many October buyers may have acted to get in under the wire. The credit was later extended to the middle of June 2010 an expanded to include not just first time home buyers.

Pending home sales in the Northeast increased 19.9 percent to 100.2 in October and is 44.2 percent above October 2008 level. In the Midwest the index climbed 11.6 percent to 109.6 and is 36.6 percent higher than last year’s level. The index in the South registered an increase of 5.4 percent to 115.4, which is 31.6 percent above October 2008. In the West the index fell 11.2 percent to 127.7 but is 21.9 percent above a year ago.

“Still, as inventories continue to decline and balance is gradually restored between buyers and sellers, we should reach self-sustaining housing conditions and firming home prices in most areas around the middle of 2010. That would mean broad wealth stabilization for the vast number of middle-class families,” Yun said.