The index measuring sales contracts for previously owned homes rose in March to its highest level since April 2010, the National Association of Realtors reported Thursday.
The 4.1 percent increase from February — a 12.8 percent year-over-year boost from March 2011 — indicated to Realtors' chief economist Lawrence Yun that "the housing market has clearly turned the corner."
"Rising sales are bringing down inventory and creating much more balanced conditions around the country, which means home prices will be rising in more areas" as 2012 progresses, he said.
March contracts in the eight-county Philadelphia region showed even better signs, rising 21 percent from February and 11.4 percent ahead of last year, according to Prudential Fox & Roach's HomExpert Market Report.
Buyers seem more confident and determined than they have been in recent years, said Diane Williams, a Weichert Realtors agent in Blue Bell: "There is pent-up demand, there have been competitive offers, and sellers are tired of waiting and are being realistic about pricing."
Continued low interest rates and increased affordability might be contributing to the rise in contracts, which typically go to settlement within 45 to 60 days of signing.
The 30-year fixed mortgage rate averaged 3.88 percent and has been below 4 percent all but one week in 2012, Freddie Mac reported Thursday. The 15-year fixed rate averaged 3.12 percent last week.
Fixed rates held near their lowest points as markets awaited the Fed's Wednesday monetary-policy announcement, said Freddie Mac chief economist Frank Nothaft.
The Fed expects economic growth to remain moderate and then pick up gradually. Labor-market conditions have improved in recent months, and the unemployment rate is expected to decline gradually.
The Fed's statement warned that despite some signs of improvement, "the housing sector still remains depressed," Nothaft said.
Despite rises in sales of previously owned homes and new-housing starts over last year, prices continued to slide, down 0.8 percent in February and 3 percent from the year-ago month, the mortgage technology company FNC reported. That drop coincides with a rising share of distressed properties in total home sales, 22.8 percent in July vs. 27 percent in February.
If this trend continued, "it could further dampen home prices in the coming months," said FNC spokesman Bill Dabney.
More distressed properties are coming on the market in the Philadelphia region. The real estate information company CoreLogic said Thursday that the area's foreclosure rate and 90-day delinquency rate rose in February to 2.57 percent and 5.72 percent, respectively, of outstanding loans.