Pending home sales junp 6.3% in April

From CNN:

The number of homes under contract to be sold rose unexpectedly in April as buyers go bargain hunting, according to a report released Monday.

Pending Home Sales Index from the National Association of Realtors (NAR) rose to 88.2 in April, up 6.3% from March's reading of 83 and the highest level since October. The increase defied the consensus estimate of economists polled by Briefing.com, who had expected pending sales to fall by 1%.

Despite the increase, April's reading remains down 13.1% from the same period last year, and down 29% from the index's peak in April 2005.

and:

The positive report indicates that the decline in home sales may be starting to slow. "Existing home sales have started to form what looks like a bottom," said Adam York, an economist with Wachovia Corp.

However, one bullish report hardly signals the resurgence of the battered housing market. "You have to see a stability in prices and inventory before you say the market has turned a corner," cautioned Asha Bangalore, economist with Northern Trust Co.

In the south, the pending sales index increased 4.6 percent from last month, but still remains 22.5 percent below last year's figure.

While it is almost certainly too early to call a bottom to the housing market, any positive home sales news is a good sign for real estate investors and other home sellers. Yes, there are additional issues that must be worked through before there is an industry-wide recovery: overall inventory remains a problem as do the number of foreclosures and resulting REO properties. Subprime, Alt-A and even prime loan resets still loom on the horizon, which will almost certainly contribute to the increasing number of foreclosures (in fact, according to Bank of America, subprime resets are scheduled to peak this month, with another spike in October).

But once all of these market forces come into balance, and eventually they will, it will be easier to call a bottom with some amount of confidence.

Still, positive news is positive news, and investors and other home sellers can look at today's NAR report as a welcome sign that the market may be easing somewhat. After all, the numbers beat market expectations, and fall into line with the NAR's predicted second-half 2008 recovery in the housing market.

The housing market is certainly not out of the woods yet, but should this trend continue, things may look a lot better at the end of the year than they did at the beginning.

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