Is the Housing Market Close to Bottoming Out?!!

With the National Association of Realtors index of pending home sales, which measures contracts signed but not closed, in December jumping to around 6.3% (about 2.1% higher than December 2007), there are flickering signs of upward growth toward a recovering housing market.

Dr. Lawrence Yun, chief economist for the National Association of Realtors, said the index shows a modest rebound. "The monthly gain in pending home sales, spurred by buyers responding to lower home prices and mortgage interest rates, more than offset an index decline in the previous month," he said.

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

Brian Wesbury, chief economist First Trust Advisors said, "It looks to me as though maybe we haven't reached the complete bottom yet, but we're in the bottoming phase right now."