Pending home sales data shows market stabilization underway

Market stabilization underway!

The National Association of Realtors has released its December 2009 data on pending homes sales, which were up 1 percent from November.

Pending home sales are an indicator of future completed sales, meaning that markets are continuing to stabilize heading into the spring buying season. The index the NAR uses to determine pending sales was at 96.6 for December compared to 95.6 for November, and up nearly 11 percent from December 2008.

 NAR chief economist Lawrence Yun in a news release said that fluctuations in the number of sales contracts have been impacted by the government’s tax credits.

 “There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded,” he said in the release. “These swings are masking the underlying trend, which is a broad improvement over year-ago levels. December activity was the fifth highest monthly tally in two years.”

Yun projects about 5.6 million existing home sales in 2010, compared to 5.16 in 2009. The rising volume, he said, should help stabilize prices further.

 “For several months now we’ve been seeing stabilization in all of the home price measures as inventory is pulled down,” Yun said. “As a result, the housing wealth for many middle class families has begun to stabilize.”