More buyers signed contracts to buy existing homes in March than the previous month, according to a monthly survey just released by the National Association of Realtors.
The Pending Home Sales Index rose 4.1 percent from February and is now 12.8 percent higher than March of 2011.
“The housing market has clearly turned the corner,” said NAR chief economist Lawrence Yun in a release. “Rising sales are bringing down inventory and creating much more balanced conditions around the country, which means home prices will be rising in more areas as the year progresses.
Contract activity was strongest out West, with the index jumping nearly nine percent.
Both the Northeast and Midwest saw declining activity.
The bulk of distressed properties are in the West, with California, Arizona and Nevada still leading the nation in foreclosure activity.
A recent spike in short sales, where the bank allows the home to be sold for less than the value of the mortgage, could be lifting the numbers in those states. Distressed sales accounted for 29 percent of all sales in March, according to the Realtors and a much higher share of sales out West.
Final sales of existing homes (closings) fell unexpectedly in March, leading many to blame the unusually warm winter for pulling demand forward. First quarter home sales saw their highest quarterly volume in five years. This bump up in new contracts, though, may be a sign that spring isn’t a complete wash. Contract cancellations, however, have been running unusually high, upwards of 30 percent, due to low appraisals and a still-tight credit market, but Realtors claim those buyers have been staying in the market, offering other contracts.
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