|Workers with Christner Services framed a building in Dubuque, Iowa. Construction spending and pending home sales fared better than expected in March. (Kori Newby/ Telegraph Herald/ Associated Press)|
Pending home resales up again
WASHINGTON - Pending sales of US existing homes posted their first back-to-back gain in almost a year in March, and construction spending ended a six-month slide, spurring a rally in stocks.
The number of Americans signing contracts to buy previously owned homes jumped 3.2 percent after a 2 percent gain in February, the National Association of Realtors said yesterday in Washington. Construction unexpectedly rose 0.3 percent as gains in commercial and government projects overshadowed a continued drop in homebuilding, Commerce Department data showed.
"People are worrying a bit less about a depression and starting to see signs of recovery," said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Conn.
Yesterday's figures indicate the biggest slump in home construction on record may end this year. Shares of builders including Hovnanian Enterprises Inc., Lennar Corp., and Pulte Homes Inc. helped spur the gains in stocks yesterday.
The Standard & Poor's 500 index rose 3.4 percent to close at 907.25. The S&P 500 Supercomposite Homebuilding Index was up 9.2 percent. The yield on benchmark 10-year notes was little changed at 3.15 percent at 4:21 p.m. in New York.
Economists forecast the pending sales index would be unchanged, according to the median of 32 projections in a Bloomberg News survey. Estimates ranged from a 2.3 percent drop to an increase of 3.5 percent.
Pending resales are considered a leading indicator because they track contract signings. The realty association's existing home sales report tallies closings, which typically occur a month or two later. The group, whose pending data goes back to January 2001, started publishing the index in March 2005.
Two of four regions saw an increase, yesterday's report showed. Purchases rose 8.5 percent in the South and 3.9 percent in the West, and fell 5.7 percent in the Northeast and 1 percent in the Midwest.
Other reports point to some stabilization in the housing market. The decline in home prices in 20 major US cities slowed during February for the first time since 2007, the S&P/Case-Shiller index showed on April 28.