The Pending Home Sales Index (PHSI), a forward-looking indicator based on contract signings, rose 5.1 percent to 94.1 in March from a downwardly revised 89.5 in February. The index is 11.4 percent below 106.2 in March 2010; however, activity was at elevated levels in March and April of 2010 to meet the contract deadline for the homebuyer tax credit.

The data reflects contracts but not closings, which normally occur with a lag time of one or two months.

"Since reaching a cyclical bottom last June, pending home sales have posted an overall gain of 24 percent and demonstrate the market is recovering on its own," says Lawrence Yun, NAR chief economist. "The index means modest near-term gains in existing-home sales are likely, which would be even stronger if tight mortgage lending criteria returned to normal, safe standards."

The PHSI in the Northeast fell 3.2 percent to 63.4 in March and is 18.4 percent below March 2010. In the Midwest, the index rose 3.0 percent in March to 83.5 but is 16.6 percent below a year ago. Pending home sales in the South jumped 10.3 percent to an index of 110.2 but are 10.5 percent below March 2010. In the West, the index increased 3.1 percent to 103.7 but is 4.1 percent below a year ago.

"Based on the current uptrend with very favorable affordability conditions, rising apartment rents and ongoing job creation, existing-home sales should rise around 5 to 10 percent this year with sales growth of lower-priced homes likely to outperform high-end homes. That means the price trend will reflect more homes sold in the lower price ranges," Yun said.

"The good news is that recent homebuyers are staying well within budget, leading to exceptionally low loan default rates among homebuyers over the past two years," Yun added.

New Listings in the West Volusia region decreased 10.5 percent from last March to 442 new homes. Pending Sales increased 52.0 percent to land at 456 contracts written. As a result, inventory levels decreased 24.2 percent from last year to reach 2,084 active listings.

Prices lost some ground - the March Median Sales Price of $75,000 decreased 15.7 percent. Negotiations moved toward buyers as Percent of Original List Price Received at Sale decreased 2.6 percent to 84.8 percent. The market moved toward balance as Months Supply of Inventory decreased to 7.9 months.

The national interest rate is 5.11 percent on a 30-year fixed; the national unemployment rate dropped to 8.8 percent in March. Several important changes to the mortgage industry are on the horizon. Ensuring access to adequate mortgage capital for qualified buyers is key to housing recovery. This will require substantial reforms to Fannie and Freddie.

"Consumer confidence, which had declined sharply in March, posted a modest gain in April. Consumers' short-term outlook improved slightly, suggesting that the uncertainty expressed last month is easing," says Lynn Franco, director of The Conference Board Consumer Research Center. "Inflation expectations, which had spiked, retreated somewhat in April. Although confidence remains weak, consumers' assessment of current conditions gained ground for the seventh straight month, a sign that the economic recovery continues."

Consumers' appraisal of present-day conditions, although mixed, improved in April. Those stating conditions are "good" decreased slightly to 14.8 percent from 15.0 percent. Those stating business conditions are "bad" also declined slightly to 36.4 percent from 36.6 percent. Consumers' assessment of the labor market was more favorable than last month. Those saying jobs are "hard to get" declined to 41.8 percent from 44.4 percent, while those stating jobs are "plentiful" increased to 5.2 percent from 4.6 percent.