The pending home sales index increased 3.2 percent in March, and is 1.6 percent higher than a year ago, the National Association of Realtors (NAR) announced today.

This is the second month in a row that the index has increased, after it reached a record low in January.

But despite back-to-back increases, NAR Chief Economist Lawrence Yun said it may still take a while before the market gains enough momentum to completely reverse the downturn in the housing market.

“We need several months of sustained growth to demonstrate a recovery in housing, which is necessary for the overall economy to turn around,” Yun said. “This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions and an $8,000 tax credit, which increases buying power even more in areas where special programs allow buyers to use it as a down payment.”

The index, which measures contracts signed, not completed sales, is believed to be a forward indicator of home sales, which could see an increase in the coming months.

“Compared to a year ago, the typical family can pay much less in mortgage costs for the same home, or buy a better home without necessarily increasing their monthly payment,” said NAR President Charles McMillan. “For buyers who’ve been on the sidelines and have good jobs, the market has never looked more favorable.”

The South saw the largest increase in March in pending home sales at 8.5 percent. The Midwest gained 3.9 percent. Both the Northeast and West regions experienced declines.