(Reuters) - Contracts to buy previously owned homes rose far less than expected in September, an industry group said on Thursday, but the data continued to point to an improving tone in the housing market.

The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in September, gained 0.3 percent to 99.5.

Economists polled by Reuters had expected signed contracts, which become sales after a month or two, to rise 2.1 percent after declining 2.6 percent in August.

"This means only minor movement is likely in near-term existing home sales, but with positive underlying market fundamentals they should continue on an uptrend in 2013," said NAR chief economist Lawrence Yun.

The housing market is steadily healing after collapsing in 2006, supported by modest job gains, increased job security and record low mortgage rates. Pending home sales were up 14.5 percent in the 12 months to September.

Contracts were up in three of the country's four regions. They fell 5.8 percent in the Midwest to the lowest rate since January.

(Reporting by Lucia Mutikani; Editing by Neil Stempleman)

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