The US pending home sales index, which is based on based on contracts signed in April, increased 6 percent to 110.9. The rise was for a third month is the highest level since October and above expectations of a 4.3 percent rise. The data was contained in a report released by the National Association of Realtors.

The rise was attributed to the then expiring government expanded the tax-credit program in November to include repeat home buyers. To qualify, contracts must have been signed by April 30 and the purchase completed by June 30.

But applications for loans to buy homes dropped last week for the fourth straight week, holding at 13-year lows, the Mortgage Bankers Association said.

Lawrence Yun, NAR chief economist, said “evidently the tax stimulus, combined with improved consumer confidence and low mortgage interest rates, are contributing to surging sales."

April's rise followed 7.1 percent gain in March and 8.3 percent in February.

Pending home sales were 22.4 percent higher than in April 2009, NAR said.