Contracts to buy US homes up, 1st time since June

WASHINGTON (AP) — More Americans signed contracts to buy homes in March, the first increase since June and a sign that the housing market might pick up after a sluggish start to the year.

The National Association of Realtors said Monday that its seasonally adjusted pending home sales index rose 3.4 percent to 97.4 last month. Still, the index remains 7.9 percent below its level a year ago.

Pending sales are a barometer of future purchases: A one- to two-month lag usually exists between a signed contract and a completed sale. The gain partly reflects a recovery from the harsh winter. Snowstorms and freezing temperatures kept many potential buyers away from open houses in January and February.

A limited supply of available homes has pushed up prices in the past year even as sales have slowed. That's likely discouraged many buyers and caused sales of existing homes to steadily decline since last summer.

Still, the rise in pending sales means that home sales could rebound during the spring buying season. It comes after two dismal sales reports last week suggested that sales and construction would increase only modestly this year.

"The March increase ... comes as a relief," said Jennifer Lee, an economist at BMO Capital Markets. "The weather-related housing pickup is still on track." Sales of existing homes fell in March to their lowest level since July 2012, the Realtors said last week. It was the seventh drop in eight months. The drop, though, was small, and many economists said it showed that existing-home sales had likely bottomed out.

At the same time, fewer Americans are applying for mortgages, a sign of weaker demand. The Mortgage Bankers Association's mortgage applications index fell 3 percent last week from the previous week. And sales of new homes plunged 14.5 percent in March to the slowest pace in eight months, according to a government report last week. A jump in prices contributed to the decline.

Higher mortgage rates have also weighed on sales. Rates are about a percentage point higher than they were a year ago.

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