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The Pending Home Sales Index moved higher in March as home sales were spurred by low mortgage rates and an expiring tax credit.

A “pending home” is a property that is under contract to sell, but not yet closed.

March marks the second straight month in which the Pending Home Sales Index improved after a series of weak showings this past winter.

March showed a 5 percent increase over the month, but the Pending Home Sales Index is still off its October 2009’s peak.  October 2009 is a comparable period to March 2010 in that it marked the 1-month deadline before the home buyer tax credit’s initial expiration date. The credit was later extended to April 2010, of course.

That said, March’s surge in sales is being felt on the street.

Home buyers in Jacksonville no doubt noticed the change in activity. Around the country, anecdotally, multiple offer situations were more common last month and “right-priced” homes tended to go under contract quickly.

The increase in March’s Pending Home Sales is diminishing the nation’s home supply which, in turn, should cause prices to rise in most markets.

Today’s buyers should consider making an offer sooner rather than later.  Looking at the data, it appears the best time to have found a “deal” on a home may have been in February.

As expected, the Pending Home Sales shot higher in February, boosted by the federal home buyer tax credit’s April 30 deadline.

Versus the month prior, February’s index rose 8 percent but remains well off the highs set last October.

For today’s home buyers and seller, the Pending Home Sales Index is an important measurement. This is because a “pending home” is a property that is under contract to sell, but not yet closed.

According to the National Association of Realtors®, 80% of homes under contract close within 60 days, historically. Therefore, a higher Pending Sales figure in February projects that April’s Existing Home Sales will be higher, too.

If you’re a Ponte Vedra home buyer today, no doubt you’ve noticed the extra market activity.

On right-priced homes, multiple offer situations are more common; sales prices are settling closer to listing price; Days on market is falling. These are the signs of a buyer-heavy market.  It drives home supplies down and home prices up.

It’s a good time to be a seller, in other words.  Especially as buyer activity looks poised to peak.

When the home buyer credit faced its last expiration in November 2009, we saw a pattern of buyers rushing to beat the deadline.  There’s no reason to expect that won’t happen again. And as it does, Pending Home Sales should continue to climb. Average home sale prices should rise.

Home buyers may find it smart to go under contract sooner rather than later. Pending Home Sales is a warning shot.  Higher home sales figures are ahead.