NAR: Single Family Homes & Condos Under Contract +5.3% In March. Increase Driven By Tax Credit.

The National Association of Realtors said that March pending home sales—as measured by single family homes and condos that went into contract for the month—increased 5.3%. This 21.1% above March 2009 and follows an 8.3% increase in February. NAR’s chief economist acknowledged that the increases in recent months were helped by the federal homebuyer tax credit, saying:

“Clearly the home buyer tax credit has helped stabilize the market. In the months immediately following the expiration of the tax credit, we expect measurably lower sales. Later in the second half of the year, and into 2011, home sales will likely become self-sustaining if the economy can add jobs at a respectable pace, and from a return of buyer demand as they see home values stabilizing.”

The Pending Home Sales Index is a leading indicator for the housing sector, based on pending sales of existing homes. A sale is listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing. The index is based on a large national sample, typically representing about 20 percent of transactions for existing-home sales.