Pending home sales increased in March, affirming that a surge of home sales is unfolding for the spring home buying season, according to the National Association of Realtors.

NAR’s Pending Home Sales Index rose 5.3% in February, and is 21.1% above March 2009. This follows an 8.3% increase in February. The PHSI measures real estate deals for which a contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

NAR chief economist Lawrence Yun said favorable affordability conditions have been working with the tax credit. “Clearly the home buyer tax credit has helped stabilize the market. In the months immediately following the expiration of the tax credit, we expect measurably lower sales,” he said. “Later in the second half of the year, and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, and from a return of buyer demand as they see home values stabilizing.”

Regional results

The PHSI in the Northeast declined 3.3% March but remains 27.2% higher than March 2009. In the Midwest, the index increased 1.2% and is 18.5% above a year ago. Pending home sales in the South jumped 12.7%, which is 28.3% higher than March 2009. In the West, the index rose 1.9% and is 8.8% above a year ago.

Source: NAR