Contracts for pending sales of previously owned U.S. homes rose faster than expected in November, though sales remained below normal activity levels, a real estate trade group said on Thursday.

The National Association of Realtors Pending Home Sales Index, based on contracts signed in November, rose 3.5 percent to 92.2 from a downwardly revised 89.1 in October. The index showed sales were 5 percent lower than the 97.0 reading in November of last year.

Economists polled by Reuters ahead of the report were expecting pending home sales to rise 2 percent.

Lawrence Yun, the association's chief economist, said low interest rates and early signs of economic recovery boosted sales, but further gains are needed to reach normal levels of sales activity.

(Reporting by Corbett B. Daly; Editing by Neil Stempleman)