While it may be too soon to call a bottom in the struggling housing market, a industry gauge of  home sales showed sales activity is now up from a year ago -- and the average price of a home moved higher in March.

The National Association of Realtors said Monday that its March pending existing home sales index rose 3.2% to 84.6, compared to a reading of 82 in February. The reading of March sales activity is up 1.1% compared to a year ago.

The increase was significantly better than the flat sales expected by economists, according to data provided by Thomson Reuters.

“This increase could be the leading edge of first-time buyers responding to very favorable affordability conditions,” said NAR Chief Economist Lawrence Yun. However, he noted, "we need several months of sustained growth to demonstrate a recovery in housing.”

The price of an existing home rose in March to $174,900.

While the March report was overall positive, there are still multiple signs if duress in the U.S. housing market. Distressed sales, which are purchases of homes in foreclosure, made up the bulk of sales in March - a sign that foreclosures remain high and prices will most likely remain low for some time. 

Also, the industry trade organization's index is for pending home sales, which are for contracts signed but not closed upon. With bank lending remaining tough to come by, it is widely expected that not all of March contracts will close. 

"As always, we must take pending home sales with a grain of salt," said Dan Greenhaus with the brokerage firm Miller Tabak.

According to NAR, sales in the South rose 8.5% in March and are now 7.7 % above a year ago.  In the West, sales rose by 3.9% and are 1.7% higher than March 2008. Sales in the Northeast, which have lagged the South and West in the trouble in the housing market, fell by 5.7% and are now 24.1% below a year ago. In the Midwest, sales slipped 1%, but remain 8.2% higher than March 2008.   

Construction Spending 

The U.S. Commerce Department said Monday that U.S. construction spending rose for the first time in six months in March.

According to the Department, construction spending rose 0.3% to a seasonally adjusted annual rate of $969.7 billion during the month. Analysts had expected construction spending would fall by 1.3% in March, according to Thomson Reuters.

Construction spending has fallen more than 11% on a year-over-year basis.