NEW YORK - People are starting to buy homes again, lifting a battered industry that is bracing for its worst sales year in more than a decade.

Signed contracts to purchase homes rose in November, the fourth increase in five months. That should give the housing market a boost in the first few months of the new year because there's usually a one- to two-month lag between a sales contract and a completed deal.

Economists cautioned that a major reason for the jump is that people are buying foreclosed homes, which sell at steep discounts and weigh on the broader market. Another obstacle is the sudden spike in the 30-year fixed mortgage rate, which only weeks ago had fallen to a 40-year low.

Still many economists expect sales to gradually rise next year as the economy adds more jobs and home prices stabilize.

The National Association of Realtors said yesterday that its index of sales agreements for previously occupied homes increased 3.5 percent last month from a downwardly revised reading in October. Contract signings were up in the West and Northeast, but down in the South and Midwest.

Completed home sales - which the Realtors group measures in a separate report - are expected to total about 4.8 million units this year. That's much lower than the 6 million units that analysts consider a healthy pace. The last time sales were lower was 13 years ago when sales totaled 4.4 million units.

A third of the pending sales likely will be foreclosures or short sales, where a homeowner sells a house for less than what is owed on it, NAR spokesman Walter Molony said. That tracks with the average for the year. These distressed sales go for discounts of up to 50 percent in some of the hardest-hit areas and will continue to weigh down home prices.

Many economists expect home prices to drop another 5 percent to 10 percent in the next six months before stabilizing.