(Adds comment from analyst, market reaction)
WASHINGTON, April 28 Contracts to buy previously
owned U.S. homes rose in March for the first time in nine
months, a sign the housing market could be stabilizing after
suffering a setback from a rise in interest rates and a severe
The National Association of Realtors said on Monday its
Pending Home Sales Index, based on contracts signed last month,
increased 3.4 percent to 97.4. The increase beat economists'
expectations for a 1.0 percent advance.
These contracts usually become sales after a month or two,
and March's rise suggested home resales could rebound in the
Sales stumbled last summer after that the U.S. Federal
Reserve signaled it would soon reduce its economic stimulus
efforts, pushing interest rates higher. A harsh winter also
helped keep potential buyers out of the market.
"The stronger pending home sales report hints at resurgence
in housing market momentum during the typically busier spring
buying season," said Gennadiy Goldberg, a strategist at TD
Goldberg said the data suggested housing would continue to
support U.S. economic growth in the coming months.
The U.S. economy hit a slow patch over the winter, which was
particularly harsh in much of the country, but growth is
expected to rebound during the rest of 2014. The U.S. Labor
Department is expected to report on Friday the economy created
210,000 jobs in April.
Prices for U.S. stocks opened higher on Monday, while the
yield on 30-year U.S. government bonds rose following the
release of the housing data.
Existing home sales had fallen to their lowest levels in
more than 1-1/2 years, but details of Monday's report suggested
the downward trend in sales had probably run its course, with
housing inventory rising and more first-time buyers coming into
Despite last month's surge, pending home sales were still
down 7.9 percent compared to March of last year.
Contracts increased in the Northeast, in the South and in
the West. They fell in the Midwest.
(Reporting by Lucia Mutikani and Jason Lange; Editing by Paul