SILVER SPRING, Md. — More Americans signed contracts to buy homes in May, a surprising rebound after months of cooling in the housing market, where lack of inventory has pushed prices to record levels.

The National Association of Realtors' index of pending home sales rose 8% to 114.7 in last month, the highest reading for May since 2005. That's up from 106.2 in April. An index of 100 is equal to the level of contract activity in 2001.

Contract signings, considered a barometer of purchases that will take place in the next one-to-two months, are 13.1% ahead of where they were one year ago with the country in the throes of the coronavirus outbreak. It's just the second month-over-month increase so far in 2021 but potentially foretell a strong finish to the summer season.

While there's no shortage of people in the market to buy, many have been forced out by the lack of properties for sale, which along with rising material costs, have sent new and existing home prices to record highs.

Last week, the Commerce Department reported that sales of new homes fell for the second straight month. The 5.9% decline in May followed a 7.8% retreat in April.