Contracts to buy previously owned U.S. homes rose sharply in February, reversing the previous month's deep decline, as the volatility of the data continues to make it difficult to parse the strength of the housing market.

The National Association of Realtors said its pending home sales index rose 3.5 percent to 109.1 last month, the highest level in seven months. January's reading was revised to show a 3.0 percent decline, which was deeper than initially reported.

Economists polled by Reuters had forecast contracts rising 1.2 percent last month.

Pending home contracts become sales after a month or two. Contracts were up 0.7 percent from a year ago.