WASHINGTON, DC—Pending sales of existing homes rose in March,the first gain in nine months and the biggest increase in theNational Association of Realtors' Pending Home Sales Index sinceMay 2011, the association said Monday. The gain was better thaneconomists polled by Bloomberg had expected. In the view ofLawrence Yun, NAR's chief economist, an increase wasinevitable.

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“After a dismal winter, more buyers got an opportunity to lookat homes last month and are beginning to make contract offers,”says Yun. “Sales activity is expected to steadily pick up as moreinventory reaches the market, and from ongoing job creation in theeconomy.”

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The PHSI rose 3.4% in March to 97.4 from an upwardly revised94.2 in February. However, it's 7.9% below March 2013, when it was105.7. An index of 100 is equal to the average level of contractactivity in 2001, according to NAR.

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Gains in the index were not uniform across different regions ofthe US. Faring best was pending home sales in the West, where theindex rose 5.6% to 91.0, although that's 11.1% below the yearprior. In the South, the increase was 5.6% to an index of 112.7, oroff 5.3% year over year.

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The PHSI in the Northeast increased 1.4% to 78.8 in March, whichis 5.9% below year-ago levels. In the Midwest, the index slipped0.8% to 94.5 in March, and is off 10.1% Y-O-Y.

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Existing-home sales have been trending upward, NAR says, but theyear's weak beginning means that 2014 is unlikely to meet lastyear's volume. Just over 4.9million homes are expected to changehands this year, below the nearly 5.1 million that traded in '13.However, given the ongoing inventory shortages in much of the U.S.,the national median existing-home price is expected to grow between6% and 7% this year.

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Be that as it may, economists found the latest NAR reportmodestly encouraging. “Pending home sales are a leading indicatorfor existing sales, suggesting at least some positive activity inthe pipeline, a welcomed reprieve after last month's -0.2% declinein existing home sales,” says Lindsey Piegza, chief economist atSterne Agee.

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And Jim O'Sullivan, chief US economist with High FrequencyEconomics Ltd. in Valhalla, NY, told Bloomberg on Monday, “Thebackdrop in general for housing remains reasonably positive. Thelabor market is improving, confidence generally has been edging upand mortgage rates are still pretty low.” O'Sullivan had predicteda 2.5% increase in the index; economists polled by Bloomberg hadforecast a median increase of 1%.

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Paul Bubny

Paul Bubny is managing editor of Real Estate Forum and GlobeSt.com. He has been reporting on business since 1988 and on commercial real estate since 2007. He is based at ALM Real Estate Media Group's offices in New York City.