INSTANT VIEW: Pending home sales, construction spending up

NEW YORK (Reuters) - Pending sales of existing U.S. homes rose unexpectedly in March, a private survey showed on Monday, supporting views that the housing market decline was close to hitting bottom.

U.S. construction spending rose a slim 0.3 percent in March in the first increase since September, according to government data released on Monday that beat analysts' forecasts of a 1.5 percent drop.

KEY POINTS:

PENDING HOME SALES * The National Association of Realtors Pending Home Sales Index, based on contracts signed in March, rose 3.2 percent to 84.6. February's pending home sales index was slightly revised down to 82.0 from 82.1. * Compared with the same period a year ago, pending home sales rose 1.1 percent. * Economists polled by Reuters had forecast pending home sales flat in March.

CONSTRUCTION SPENDING * But there were also signs of weakness in the Commerce Department's report on construction spending, which totaled $970 billion at an annual rate in March. * February spending was revised to a 1.0 percent drop from the 0.9 percent decrease originally reported, and March's spending rate was 11.1 percent below that in March 2008. * Private construction dropped 0.1 percent in March, mostly from a 4.2 percent decrease in residential building, which makes up more than a third of the category.

COMMENTS:

PIERRE ELLIS, SENIOR ECONOMIST, DECISION ECONOMICS, NEW YORK:

"The rise in pending home sales is good news. They kicked up at a time of year when the seasonal adjustment is tough so it looks like a legitimate rise and will encourage the Federal Reserve and Treasury as to the effectiveness of their efforts.

"March construction spending was notable for a surprising jump in private non-residential spending. This does not mean the tide is turning, but it might indicate that weakness in this sector was overestimated in the first quarter GDP numbers. Clearly there are more declines ahead. So far there is no evidence of a slowing decline in the single-family sector though eventually that will come, too. The rise in March construction spending is probably misleading as an indication of a long-run trend."

CARL LANTZ, U.S. INTEREST RATE STRATEGIST, CREDIT SUISSE, NEW YORK:

"It is a continuation of the trend we've seen of better-than-expected data so it is weighing on the bond market it a bit."

OMER ESINER, SENIOR MARKET ANALYST, RUESCH

INTERNATIONAL WASHINGTON:

"These are clearly upside surprises to the U.S. data, which have furthered the notion that the worst of the crisis is behind us. The subsequent rise in risk appetite has benefited equities and has undermined demand for the greenback and the yen as a safe haven."

MARK BONHARD, INVESTMENT ADVISOR, DAWSON WEALTH MANAGEMENT, CLEVELAND, OHIO:

"My general sense is that things are starting to improve a little bit in housing. A couple of my clients who are realtors are saying they have noticed that in the last month or two. The low interest rates seem to be kicking in."

MICHAEL DARDA, CHIEF ECONOMIST, MKM PARTNERS LLC, GREENWICH, CONNECTICUT:

"Home sales are increasing evidence that home sales have indeed bottomed in the first quarter. That's critical because once sales bottom its only a matter of time before you work off excess inventories, that's the key to stabilization in the financial system and the economy at large. We're closer to that than people thought just a few months ago."

JOSEPH TREVISANI, CHIEF MARKET ANALYST, FX SOLUTIONS, SADDLE RIVER, NEW JERSEY:

"Looks like we have stability in the housing market. When that starts everything else in the economy can begin to recover. It is probably a little bit stronger for the dollar over time."

MARKET REACTION: STOCKS: U.S. stock indexes add to gains BONDS: U.S. Treasury debt prices hold losses DOLLAR: Euro extends gains versus U.S. dollar