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Pending Home Sales Skyrocket in March, Signalling a Spring Rebound for Housing

The numbers: An index of pending-home sales surged 3.8% in March, the National Association of Realtors said Tuesday. Economists surveyed by Econoday had forecast a 0.7% monthly increase.

What happened: The pending-home sales index, which tracks home-contract signings, has been volatile over the past few months, but the trend for housing has generally been down. March marked the 15th straight month of yearly declines for the pending sales index, which fell 1.2% over the last 12 months.

Also on Tuesday, the widely-followed Case-Shiller index showed home prices had risen at the slowest pace since mid-2012 in February.

In March, only the Northeast region saw a decline, of 1.7%. Pending home sales were up 4.4% in the South, 2.3% in the Midwest, and a convincing 8.7% in the West, an area dogged by higher prices and stung by recent tax law changes.

Big picture: Contract signings usually precede closings by about 45 days, so the pending home-sales index is a leading indicator for upcoming existing-home sales reports. The Realtors expect sales of existing homes to be 1.1% lower in 2019 than last year. All eyes are on the busy spring selling season to see if things turn around.

What they’re saying: “There is a pent-up demand in the market, and we should see a better performing market in the coming quarters and years,” said Lawrence Yun, NAR’s chief economist.

Market reaction: The Dow Jones Industrial Average opened higher on Tuesday as investors weighed rosy earnings.

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