Pending home sales in the United States increased in March and are well above a year ago, a signal that the housing market is recovering, according to the National Association of Realtors.
Its Pending Home Sales Index, A forward looking indicator based on contract signings, rose 4.1% to 101.4 in March from an upwardly revised 97.4 in February and is 12.8% above March 2011 when it was 89.9. The data reflects contracts but not closings.
The index is now at the highest level since April 2010 when it reached 111.3 and NAR chief economist Lawrence Yun said 2012 is expected to be a year of recovery for housing.
‘First quarter sales closings were the highest first quarter sales in five years. The latest contract signing activity suggests the second quarter will be equally good,’ he pointed out.
‘The housing market has clearly turned the corner. Rising sales are bringing down inventory and creating much more balanced conditions around the county, which means home prices will be rising in more areas as the year progresses,’ Yun added.
The PHSI in the Northeast slipped 0.8% to 78.2 in March but is 21.1% above March 2011. In the Midwest the index declined 0.9% to 93.3 but is 16.9% higher than a year ago.
Pending home sales in the South rose 5.9% to an index of 114.1 in March and are 10.6% above March 2011. In the West the index increased 8.7% in March to 108.0 and is 9% above a year ago.
The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.
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