For 4 consecutive months, the Pending Homes Sales Report generated by the National Association of Realtors has shown a sustained increase.

The Pending Home Sales Index, a forward-looking indicator based on contracts singed in May, increased 0.1 percent to 90.7 from an upwardly revised ready of 90.6 in April.  It is 6.7 percent higher than one year earlier when it was 85.0 in May, 2008.  The last time there were four consecutive monthly gains was in October, 2004.

Closed home sales have improved but are still lower than expected.  Some contracts either fall through or there is a delay in the closing process either through stricter loan standards or appraisal guidelines. 

Pending home sales are a great indicator of activity in the market.  It means prospective Buyers are stepping out, testing the waters and putting contracts on homes. 

Improved housing affordability and buyer tax credit of up to $8,000 is helping spur buying activity in many areas.