Pending home sales jumped again in March by 5.1%, according to the National Association of Realtors (NAR). The Pending Homes Sales Index (PHSI) is a brief glance into the future of real estate based on the amount of contracts that were signed, not closings. Closings normally occur within a month or two of the signing of the contract.

Although the index has declined by 11.4% in an annual comparison, activity was particularly high this time last year due to the deadline of the Homebuyer Tax Credit.

According to Lawrence Yun, NAR Chief Economist, 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. 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.

Yun went on to say, 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.