Existing home sales were up slightly ^[1] in March, and analysts at Standard & Poor's expect it to be the start of a better spring for real estate.

The National Association of Realtors reported a 3.7% gain in existing home sales in March. S&P said in a report late Friday that because pending home sales – usually an indication of transactions to come – increased in February, existing home sales should increase in April.

"Pending home sales were down in December and January, but showed a modest increase in February," analysts said. "As a result, April's existing home sales are likely to improve. Standard & Poor's believes the spring months are likely to improve sales as well. Pending sales usually lead existing home sales by one to two months."

Analysts at Barclays Capital agree, saying the existing home sale data for March is a good sign for U.S. housing. In fact, BarCap analysts said in their own report the housing market bottomed late in 2010.

"The soft housing data in February rekindled fears in some quarters about further weakness emanating from the housing sector," BarCap said. "The incoming data for March suggest this fear was overstated, as the rebound in both starts and existing home sales indicates that recent weakness is transitory, perhaps due to adverse weather, and affirms our view that the housing market bottomed late last year."

The average level of housing starts in the first quarter of 2011 was 563,000 units, which was 5.4% higher than in the previous quarter. Still, both BarCap and S&P analysts agreed as many have for some time now that there is much work to be done on the foreclosure inventory before a recovery can take hold.

"The road to recovery for housing will be protracted, given the high inventory of foreclosed properties and relatively tight credit standards that we expect to remain," BarCap said. "Job growth will continue to be a key factor in supporting housing demand in 2011."

Posted By JON PRIOR On April 25, 2011 @ 5:23 am  HousingWire.com