While it’s too soon to predict a turnaround in the market, the Pending Home Sales Index and construction showed slight increases in March.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in March, increased 3.2 percent to 84.6 from 82.0 in February, and is 1.1 percent higher than March 2008, when it was 83.7.
Lawrence Yun, chief economist for the National Association of Realtors, says it should take a few months for the market to gain momentum.
“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 down payment,” he says. “We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around.”
Construction spending also increased from $967.1 billion in February to $969.7 billion in March – a jump of 0.3 percent, according to the U.S. Census Bureau of the Department of Commerce.
While small, it’s the first increase in overall construction spending in six months. Public construction increased 1.1 percent after a 1.3 percent increase in February, thanks to state and local government projects. On the downside, private construction was down 0.1 percent from February, thanks to a 4.1 percent drop in residential construction.
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