Pending home sales rise 6.3%

The National Association of Realtors (NAR) index of pending home sales, or property under contract rose unexpectedly in April to 88.2, up 6.3% from 83 in March and represents the highest level since October. This could be attributed to bargain hunting buyers entering the market place as housing becomes increasingly affordable.

The Pending Home Sales index first appeared in 2001 and 100 represents the reading achieved in that first year. This index is generally considered a potential barometer of future home sales, as pending home sales are typically counted a month or two before the signing of a closing sales contract.

Due to falling house prices, NAR has issued an improved 2008 forecast for existing home sales, dipping 4.5% instead of 4.7% forecasted in May.

"Bargain hunters entered the market en masse, especially in areas that have experienced double-digit price declines..." said Lawrence Yun, chief economist for the NAR in a statement.

This report may indicate that the overall decline in home sales may be starting to slow, and some leading industry analysts have asserted that home sales have started to form what looks like a bottom. When home sales eventually pick up, home prices may rise, so the best prices may already be here.