Pending sales of previously owned U.S. homes rose more than expected in August to a four-month high, indicating the housing market was regaining some stability after recent steep declines.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in August, increased 4.3 percent, to 82.3, from July.
It was the second straight month of gains in the index, which leads existing home sales by a month or two. July contracts were revised down to show a 4.5 percent increase from the previously reported 5.2 percent rise.

Economists polled by Reuters forecast the index rising 3.0 in August from July. Compared to the August last year, pending home sales were down 20.1 percent.

Home sales and building activity are stabilizing after a downward spiral after the end in April of a popular tax credit for home buyers. But high unemployment and a glut of homes on the market imply recovery will be very weak.