The National Association of Realtors [NAR], reported on Monday the Pending Home Sales Index, a forward-looking indicator based on contracts signed (not completed sales) in March, increased 3.2% in February and was up 1.1% compared with a year earlier.
From NAR: Lawrence Yun, NAR chief economist, said: “This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a downpayment.”
Despite the March data Yun still remains reluctant to call a bottom in the sector – since the index is still at a relatively low levels. He would like first the number of homes on the market to drop to a more normal level of six to seven months of supply.
“If inventory goes down – it’s at just under 10 months now – to below eight months, that would mean we’re on the way to a sustainable recovery,” Yun said.
The report also said the South saw the largest gain of any region, with pending home sales increasing by 8.5% to 93.2 in March. Pending sales are 7.7% higher there compared with a year ago.