Contracts to purchase previously owned U.S. homes increased solidly to a near two-year high in March, suggesting the spring selling season got off to a firmer start and offering hopes of a pickup in housing.
The National Association of Realtors said on Thursday its Pending Home Sales Index, based on contracts signed in March, jumped 4.1 per cent to 101.4, the highest level since April 2010.
Economists polled by Reuters had expected signed contracts, which lead existing home sales by a month or two, to rise 1.0 per cent after a previously reported 0.5-per-cent fall.
March’s strong rise in signed contracts pointed to a pick up in home resales after they stumbled in the past two months.
The housing market, saddled with an oversupply of unsold properties, has struggled to regain its footing since collapsing in late 2006. It remains a major constraint to faster economic growth.
“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,” said Lawrence Yun, chief NAR economist.
Signed contracts were up 12.8 per cent in the 12 months to March.
Contracts rose strongly in the South and West, but fell in the Northeast and Midwest.