Regionally the largest increase was seen in the West, up 16 percent. The smallest increase was seen in the South, up only .8 percent.

Some analysts believe this increase in pending sales is at least partially related to the first time home buyer tax credit.

Lawrence Yun, NAR chief economist, notes, "The rise in pending home sales shows buyers are returning to the market and signing contracts, but deals are not necessarily closing because of long delays related to short sales, and issues regarding complex new appraisal rules," he said. "No doubt many first-time buyers are rushing to beat the deadline for the $8,000 tax credit, which expires at the end of next month."

Yun continued that the forecast on home sales could depend largely on whether the credit is extended by Congress. "All we can say for certain is sales will decline when the tax credit expires because we are not yet on a self-sustaining recovery path. It also raises a risk of a double-dip recession," he said. "Extending and expanding the tax credit is the best tool in our arsenal to encourage financially qualified buyers to stimulate the economy and help reduce the budget deficit."