Pending home sales rose in July to the highest level in over two years according to an industry report released Tuesday. It was observed that the increase can be attributed to first time buyers who rushed to take advantage of a tax credit which will expire in November 30.

The National Association of Realtors Association said the Pending Home Sales Index report showed that the housing market is recovering faster than expected. Both the tax credit and the historic low prices which are starting to increase in some parts of the country have encouraged sales.

The seasonally adjusted index of sales contracts signed in July for previously occupied homes increase rose 3.2 percent to 97.6. It was the sixth straight month of increase, and was 12 percent above the same month last year’s reading.

The index includes signed contracts to purchase previously owned homes and is considered a measure future home sales activity with a one to two months lag between contract signing and completion of the deal

Regionally, 12 percent sales contract increase was recorded in the West and a 3 percent rise in the South drove July’s overall increase. Northeast and Midwest index reading dropped.

The NAR forecasts around 2 million first-time buyers will take advantage of the tax credit before it expires and would encourage 350,000 additional sales that wouldn’t have happened otherwise.