Contracts to buy previously owned U.S. homes rose in March for the first time in nine months, a sign the housing market could be stabilizing after suffering a setback from a rise in interest rates and a severe winter.

The National Association of Realtors said on Monday its Pending Home Sales Index, based on contracts signed last month, increased 3.4 per cent to 97.4. The increase beat economists’ expectations for a 1.0 per cent advance.

These contracts usually become sales after a month or two, and March’s rise suggested home re-sales could rebound in the months ahead.

Existing home sales had fallen to their lowest levels in more than 1-1/2 years, but details of Monday’s report suggested the downward trend in sales had probably run its course, with housing inventory rising and more first-time buyers coming into the market.

Despite last month’s surge, pending home sales were still down 7.9 per cent compared to March of last year.

Are you looking to invest in property? If you like, we can get one of our mortgage experts to tell you exactly how much you can afford to borrow, which is the best mortgage for you or how much they could save you right now if you have an existing mortgage. Click here to get help choosing the best mortgage rate

More market watch: