The pending home sales index increased 0.9 percent to 112.6, the highest since April 2006, after a revised 2.7 percent advance in the previous month, the National Association of Realtors said Monday in Washington. The median projection in a Bloomberg survey of economists called for the gauge to climb 1 percent.

Employment growth, a pickup in incomes and relatively low borrowing costs are helping lure buyers, including those making their first foray into the market. Progress in residential real estate and more construction will further fuel the economy after a weak start to the year.

'The housing data all seem to be generally pointing in the upward direction,'' said Joe LaVorgna, chief U.S. economist at Deutsche Bank Securities Inc. in New York, whose forecast matched the Bloomberg survey median. "The labor market is going to help it a lot."