The job market might still be trying to find its footing, but with pending home sales at a nearly two-year high, the housing market at least seems to be heading back on track.
The measure, which represents signed contracts for home purchases in the U.S. and helps forecast finalized sales, rose 4.1% in March to 101.4 on a monthly index from the National Assn. of Realtors.
That’s the highest level since April 2010, when the index reached 111.3. March’s number, coming off a 0.4% gain in February to 97.4, also lends credence to reports that first quarter closings in 2012 were the best in five years.
Pending home sales for last month came in 12.8% higher than the 89.9 the index reached in March 2011. In the West, the index settled at 108, an 8.7% month-to-month jump and a 9% increase compared to last year.
“The housing market has clearly turned the corner,” said the association’s chief economist, Lawrence Yun, in a statement. “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.”
Analysts from Credit Suisse said record affordability helped, as did “the incredibly warm winter,” even though they noted that the upward trend for pending sales started in the fall.
This week brought a round of encouraging housing figures. The number of new foreclosure actions on California homes fell to its lowest level – 56,258 default notices – in nearly five years. Home prices are still falling, but the speed of the drop is slowing. Although new home sales in March fell 7.1%, the government revised the February figures heavily upward.