US housing slump may be at bottom

The number of Americans signing contracts to buy previously owned homes jumped in March for the first back-to-back gain in almost a year, reinforcing signs the housing slump in its fourth year may be near a bottom.

The 3.2 per cent gain in the index of signed purchase agreements, or pending home resales, compared with a 2 per cent increase in February, the National Association of Realtors said.

The March reading of 84.6 was 1.1 per cent higher than the 83.7 level in the same month a year earlier.

Declines in values and lower mortgage rates are putting homes within reach for more Americans, potentially charting a path out of the housing recession.

The report sent benchmark stock indexes to levels not seen since January and indicated that tax breaks for first-time buyers and efforts to thaw credit are paying off.

"Confidence has improved," said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. "People are worrying a bit less about a depression and starting to see signs of recovery, and that means you're going to see more people jump into the market."

Economists forecast the index would be unchanged, according to the median of 32 projections in a Bloomberg News survey. Estimates ranged from a 2.3 per cent drop to an increase of 3.5 per cent.

Pending resales are considered a leading indicator because they track contract signings.

- BLOOMBERG