WASHINGTON (Reuters) - Pending sales of existing U.S. homes rebounded in December, data showed on Tuesday, as buyers waded back into the market to take advantage of lower prices and mortgage interest rates.
The National Association of Realtors Pending Home Sales Index, based on contracts signed in December, surged 6.3 percent to 87.7, rising for the first time since August. Compared with the same period a year-ago, pending homes sale were up 2.1 percent in December.
Economists polled by Reuters had forecast pending home sales to be flat in December. November's pending home sales index was revised up to 82.5.
U.S. stock indexes briefly turned positive on the report, but later headed lower as investors fretted about poor earnings. Government bond prices, which typically tend to rise on data showing rising distress in the economy, extended losses.
"In an otherwise bleak landscape, this represents a ray of hope, as it's a leading indicator for existing home sales. I'm sure it's foreclosure-driven, so it could be a hollow number," said Brian Dolan, chief currency strategist at Forex.com, in Bedminster, New Jersey.
Data from the housing market, which is at the center of the worst financial and economic crisis in decades, has sent conflicting signals in recent days.
Last week, the NAR reported an unexpected rise in existing home sales in December, driven mainly by distressed sales, with prices falling from a year earlier by the biggest margin in over 40 years.
The NAR's housing affordability index jumped 10.9 percent in December to 158.8, the highest since it began tracking records in 1970. The index rose on falling home prices and low mortgage rates.
But government data Thursday showed sales of new U.S. single-family homes dropped in December by their biggest margin since 1994.
Stability in the housing market is critical to the U.S. economy's recovery. The economy slipped into recession in December 2007.
Falling house prices, coupled with the stock market collapse and tight access to credit, have hit consumer spending, which accounts for about two thirds of U.S. economic activity.
(Reporting by Lucia Mutikani, additional reporting by Steven C Johnson in New York; Editing by Neil Stempleman)