Economists See Hope in Home Sales Figures

After months and months of painful data, economists said there is a sliver of sunshine in a housing report released Thursday.

The National Association of Realtors announced that June pending homes sales increased a stronger-than-expected 5.3 percent from the previous month, although sales remain more than 12 percent lower than year-ago levels.

Economists had been expecting the report to show a 1 percent drop. "While this indicator is volatile and affected to an unknown degree by foreclosures, it does suggest that conditions in the resale market for real estate may be stabilizing," economists at Goldman Sachs said in a report.

How about you, Ian Shepherdson, chief U.S. economist at High Frequency Economics? (Emphasis is mine.)

This is the second upside surprise in three months, so it is [hard] to ignore. We're guessing, though the numbers offer no [breakdown], that sales of foreclosed homes are driving activity. Sales rose everywhere but the biggest gains were in the south, up by 9.3%, and the west, up 4.6%, where foreclosures have been [highest]. We doubt sales of non-foreclosed homes are rising, given the recent rise in mortgage rates and continued price declines. [Still], anything which reduces inventory, whether of foreclosed [homes] or not, is a very welcome development. It does not fix the housing market, though, but it might be the beginning of the end of the crash.