Pending home sales rose to their highest level in 21 months in January, according to the National Association of Realtors, as agents signed more contracts for existing homes.

The seasonally adjusted index increased 2% month-over-month to 97 from a downwardly revised 95.1 in December. Signed contracts also jumped 8% over the year-earlier reading of 89.8.

The trade group's index marked its highest point since a 111.3 reading in April 2010, also the last time it topped 100.

Analysts polled by Econoday predicted 1.5% monthly growth, with a consensus range between a 1.1% drop and a 3% increase.

Lawrence Yun, NAR chief economist, said job growth and rising rental rates "are hopefully pushing the market into what appears to be a sustained housing recovery," despite wavering in the pending home sales. The index dipped in December from 96.9 in November.

"If and when credit availability conditions return to normal, home sales will likely get a 15% boost, speed up the home-price recovery, and thereby significantly reduce the number of homeowners who are underwater," Yun said in a release.

Pending sales grew 7.7% and 7.6% in January month-over-month in the South and Northeast, respectively, while West and Midwest sales fell 4.4% and 3.8%. All four regions, however, saw signed contracts increase from a year earlier, from 10.8% in the Midwest to 0.7% in the West. (Click chart to expand.)