Pending home sales fell 4.9% MoM in December and were expected to rebound 3.0% MoM in January but accelerated more, rising 5.2% MoM (and December was revised up to -4.3% MoM)

That MoM rise is the biggest jump since October 2010.

"This month's solid activity -- the second-highest monthly figure in over two years -- is due to the good economic backdrop and exceptionally low mortgage rates," Lawrence Yun, NAR's chief economist, said in a statement.

"We are still lacking in inventory."

Signings last month increased in all regions but the West. The index of pending sales jumped 8.7% in the South, the biggest region, to the highest level since March 2006.

Of course, mortgage rates have collapsed in recent days suggesting more demand...