Pending home sales rebounded by 5.3% in June, according to the National Association of Realtors (NAR), against expectations that the index would fall by 1.0%. The bounce is better than the most optimistic forecasts and follows a downwardly revised 4.9% drop in the prior month.

This is the second unexpected bounce in the past three months. April's index rebounded 7.1% after the seven-year index hit an all-time low in March.

The consensus was expecting the PHSI to fall by 1.0% in the month, with estimates ranging from -3.0% to +3.5%.

The PHSI now stands at 89.0, up from 84.5 in the previous month. From a year prior, the index has declined by 12.1%, compared with the previous month's 15.7% annual decline.

Each of the four regions saw improvement in the month as sales in the Midwest rose 1.3%, the South rose 9.3%, the West advanced 4.6% and the Northeast posted a 3.4% gain.

The PHSI looks at home sales that have been signed but not finalized, a process that takes another month or two. The value of the index lies in its ability to forecast existing home sales, which represent eight-tenths of the market.

By Patrick McGee and edited by Nancy Girgis