WASHINGTON (Reuters) -Contracts to buy U.S. previously owned homes surged by the most in more than a year in March, boosted by a decline in mortgage rates.

The National Association of Realtors (NAR) said on Wednesday its Pending Home Sales Index, based on signed contracts, jumped 6.1% to 76.5 last month. The increase was the largest since December 2023.

Economists polled by Reuters had forecast contracts, which become sales after a month or two, rising 1.0%. Pending home sales fell 0.6% from a year earlier.

"Home buyers are acutely sensitive to even minor fluctuations in mortgage rates," said Lawrence Yun, the NAR's chief economist. "While contract signings are not a guarantee of eventual closings, the solid rise in pending home sales implies a sizable build-up of potential homebuyers, fueled by ongoing job growth."

The rate on the popular 30-year fixed-mortgage dropped to 6.65% in March from 7.04% in mid-January, data from mortgage finance agency Freddie Mac showed.