Thursday, February 5, 2009

Pending Home Sales Show Healthy Gain

Yes, it's true. The National Association of Realtors has reported that the Pending Home Sales Index, a forward-looking indicator based on contracts signed, reported modest gains in December with an increase of 6.3% to 87.7. Additionally, NAR's housing affordability index (HAI), which shows the relationship between home prices, mortgage interest rates, and family income, rose 10.9% in December to 158.8 which is the most favorable number since 1970.

According to Lawrence Yun, NAR chief economist, “The monthly gain in pending home sales, spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month.” He continues, however, that "significant uncertainty still clouds the housing market despite improved affordability conditions. For a sustainable housing market recovery and, hence, sustainable economic recovery, we need a significant housing stimulus and mortgage availability for qualified borrowers."

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