Major improvement can be expected for existing home sales in the March to April period based on February's pending home sales index which jumped 5.5 percent to 112.3. This is well beyond the Econoday consensus which was already calling for a sizable 2.4 percent gain. This index tracks initial contract signings and though winter months are always volatile due to seasonality and related adjustments, today's results will raise expectations for spring momentum in the housing sector.
Still, the year-on-year rate for this index, at only plus 2.6 percent, is a reminder that the resale market, though at its highs for the economic cycle, is still struggling. Regional data show special February strength in the Midwest, up 11.4 percent, followed by low-to-mid single digit gains across other regions.