“When you ask people why are they in the market right now they tell you, ‘Because home prices have stopped falling in some sickening way,'” said Glenn Kelman, chief executive of Redfin Corp., a Seattle-based brokerage. “They worry they could lose a little bit, but there was a time you really had to close your eyes before signing an offer, and hope you weren’t going to lose 10% of your equity in 12 months.”

The number of contracts signed to buy homes in February eased slightly from January but posted another strong gain from a year ago—the latest sign that demand for homes is up from the depressed levels of the previous 18 months. A report Monday by the National Association of Realtors showed the index of pending home sales, reflecting deals that have gone into contract but haven’t yet closed, rose 9.2% last month from a year earlier, continuing a rise largely fueled by investors’ purchases of foreclosed properties. The index fell by 0.5% from January. While buyers are starting to step forward, however, home builders and real-estate agents report an elevated level of contracts falling apart, as buyers run into trouble qualifying for mortgages amid tough lending standards.
By Nick Timiraos, March 26, 2012 WSJ

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Chart Credit: WSJ 03/27/12