By Alan Zibel and Jeff Bater
Published April 28, 2011 | Dow Jones Newswires
WASHINGTON -(Dow Jones)- The number of people who signed contracts to buy previously occupied homes in the U.S. climbed more than expected last month as buyers took advantage of steep discounts on properties after a weak winter.
The National Association of Realtors‘ seasonally adjusted index for pending sales of existing homes increased 5.1% on a monthly basis to 94.1, the industry group said Thursday. It was the highest reading since November. February’s reading was revised downward to 89.5 from an original reading of 90.8.
Economists surveyed by Dow Jones Newswires had expected pending home sales would climb by 1.5% in March.
The pending sales index, however, was 11.4% below its level of 106.2 in March 2010, when government tax credits were fueling sales. A reading of 100 refers to the level of sales in 2001.
It was the second-straight monthly increase for the index, which tracks agreements to purchase homes. A sale is considered pending when the contract has been signed but the transaction hasn’t closed. Pending sales typically close within one or two months of signing.
Other economists, however, see the housing market as a key source of weakness for the U.S. economy. There are many signs that the market remains weak. High rates of joblessness and elevated foreclosures continue to depress home values, which are now just above a low reached during the recession.
The S&P/Case-Shiller 20-city and 10-city home price indexes released earlier this week were both down 1.1% in February from a month earlier, and the 20-city index was 3.3% below the level recorded in February 2010.
The NAR index is based on pending sales of existing homes, including single-family homes and condominiums. In its latest monthly forecast, the NAR projected existing-home sales will recover this year, growing to about 5.3 million this year and 5.6 million in 2012, up from 4.9 million last year.
The median sales price for an existing home is forecast to fall to $169,800 this year, down from $172,900 in 2010.