A gauge of pending US existing-home sales rebounded sharply in December to a five-month high, suggesting the recent drop in mortgage rates is helping to stabilize the resale market.

The National Association of Realtors’ index of contract signings increased 8.3% to 77.3 after holding at a record low a month earlier, according to data out Friday. Last month’s advance — the largest since mid-2020 — exceeded all estimates in a Bloomberg survey of economists.