Home Sales/Construction Spending Stabilize

Pending home sales and construction spending both increased in March, according to the National Association of Realtors.

Pending home sales rose 3.2 percent in March, due in large part to first-time buyers taking advantage of affordable home prices. Construction spending increased 0.3 percent, according to the U.S. Department of Commerce. Public construction (1.1 percent) and private construction (0.1 percent) both increased.

The Pending Home Sales Index published by the National Association of Realtors increased to 84.6 in March, up from February's level of 82.0. March's figure is also 1.1 percent higher than the same period in 2008, when it was 83.7.

Lawrence Yun, the group's chief economist, said in a statement it would probably take "a few months" for the market to gain momentum.

“We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around,” Yun said.

The index was up 8.5 percent in the South and 3.9 percent in the West. It fell 5.7 percent in the Northeast and 1 percent in the Midwest.

The Pending Home Sales Index is a forward-looking indicator based on home sales contracts signed in March, basically the number of home sales in progress.

Source: National Association of Realtors