WASHINGTON (MarketWatch) — Home buying this spring looks to be starting off on a strong note. That is a good sign for the housing market, which also points to broader economic strength, economists said Wednesday.

A gauge of upcoming used-home sales rose 1.1% in March to hit the highest level in almost two years, according to the National Association of Realtors, racing past the 0.3% increase expected by economists polled by MarketWatch. March’s improvement marked a third consecutive month of gains, and is likely due to firm demand in cities with solid jobs growth, NAR said.

“It appears as if the spring selling season is starting off on solid footing, as pending home sales continue to increase,” said economists with Wells Fargo Securities. "The continued improvement in this index suggests further improvement in existing home sales.”

They added that sales of existing, or used, homes involve brokers’ commissions, which could pick up this quarter, supporting broader economic growth.

Here’s another sign that buyer interest is on the rise in the housing market. Applications for loans to buy a home are hanging around the highest level in almost two years, according to a gauge from the Mortgage Bankers Association.

Given Wednesday morning’s news that the U.S. economy barely grew in the first quarter, positive developments for housing are particularly welcome. Last week NAR reported that the pace of existing-home sales recently hit an 18-month high.

“The string of positive pending sales releases during the first quarter of 2015 contrasts with the disappointing first quarter GDP results,” said Stephen Melman, economic services director at the National Association of Home Builders. “However, the good [pending home sales] report suggests continued good news for the existing sales market and for builders in 2015.”

Homeownership rates are at a 25-year low, held back by weak income growth, economists say. Young families, in particular, have a tough time putting together enough cash for a down payment. But that doesn’t mean they’ll never own a home.

“Millennials have simply delayed homeownership, not ruled it out altogether, so demand from this group will be rising over the coming years as they finally take the plunge, albeit belatedly,” said Stan Humphries, chief economist at real estate site Zillow.

And there are hints that first-time buyers are tiptoeing into the home-buying market. Mortgages backed by the Federal Housing Administration, which insures loans with low down payments, are making up a greater share of sales of new single-family homes, while cash deals recently declined.