Home Sales Activity Increase

In December, the number of people preparing to buy a home rose slightly, a positive sign heading into the spring home buying season.

The National Association of Realtors seasonally adjusted index of sales agreements increased 1 percent from November to December to a reading of 96.6, it stated.

According to Thomson Reuters, that was a bit lower than the 97.1 level analysts expected.

As buyers work to take advantage of an $8,000 first-time homebuyer tax credit, the index has risen for nine out of the past 10 months.

Before Congress extended it to April 30, the credit had been set to expire November 30.

Also, lawmakers added a $6,500 credit for current homeowners.

As activity temporarily died down after the first-time buyer credit was extended, the pending home sales index fell 16 percent from October to November.

Compared to December 2008, the index is up nearly 11 percent.

Lawrence Yun, the Realtors' group chief economist, stated "These swings are masking the underlying trend, which is a broad improvement over year-ago levels."

Mike Larson, a real estate analyst with Weiss Research, stated "The result? We'll likely just muddle through instead of witness a V-shaped recovery like those that followed previous housing busts."

Source: msnbc.msn.com