Falling Home Prices Push Pending Sales Higher

Low mortgage rates and cheaper home prices--driven downwards by mounting foreclosures--triggered an unexpected increase in December pending home sales, the National Association of Realtors said Tuesday.

From NAR:

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in December, rose 6.3 percent to 87.7 from an upwardly revised reading of 82.5 in November, and is 2.1 percent higher than December 2007 when it was 85.9.

NAR’s Housing Affordability index rose 10.9 percent in December to 158.8, the highest on record.2 The HAI shows that the relationship between home prices, mortgage interest rates and family income is the most favorable since tracking began in 1970.

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