(fxcue news) - Pending home sales in the U.S. spiked by much more than expected in the month of September, according to a report released by the National Association of Realtors on Wednesday. NAR said its pending home sales index soared by 7.4 percent to 75.8 in September after climbing by 0.6 percent to 70.6 in August. Economists had expected pending home sales to jump by 1.1 percent. A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale. With the much bigger than expected surge, the pending home sales index reached its highest level since hitting 78.3 in March. "Contract signings rose across all regions of the country as buyers took advantage of the combination of lower mortgage rates in late summer and more inventory choices," said NAR Chief Economist Lawrence Yun. He added, "Further gains are expected if the economy continues to add jobs, inventory levels grow, and mortgage rates hold steady." The report said pending home sales in the West ballooned by 9.8 percent, while pending home sales in the Midwest spiked by 7.1 percent and pending home sales in the South and Northeast surged by 6.7 percent and 6.5 percent, respectively. Looking ahead, Yun said he expects slower home price appreciation and a corresponding increases in sales in the next two years. "After two years of sluggish home sales in 2023 and 2024, existing-home sales are forecasted to rise to 4.47 million in 2025 and more than 5 million in 2026," Yun said. He added, "During the next two years, expect a slower rate of growth in home prices that's roughly in line with the consumer price index because of additional supply reaching the market." Yun forecasts the median existing-home price will rise to $410,700 in 2025 and to $420,000 in 2026, while the annual 30-year fixed mortgage rate is expected to slide to 5.9 percent in 2025 but then move higher to 6.1 percent in 2026.