The first week of March, The National Association of Realtors® reported that pending home sales have declined--with many home buyers waiting for clarity on housing stimulus provisions.

The Pending Home Sales Index, a forward-looking indicator based on contracts signed in January, fell 7.7 percent to 80.4 from a downwardly revised reading of 87.1 in December, and is 6.4 percent below January 2008 when it was 85.9.  The index is at the lowest level since tracking began in 2001, when the index value was set at 100.

According to Lawrence Yun, NAR chief economist, the downturn in the economy also weighed heavily on the data.  "Even with many serious potential home buyers on the sidelines waiting for passage of the stimulus bill, job losses and weak consumer confidence were a natural drag on home sales," Yun said.  "We expect similarly soft home sales in the near term, but buyers are expected to respond to much improved affordability conditions and from the $8,000 first-time buyer tax credit."

NAR President, Charles McMillan, stated it's ironic with the weak housing market that affordability conditions have improved dramatically.  "Housing affordability is at a record high--the buying power of a typical family has risen significantly," he said.  "With the drop in interest rates, a median-income family can afford a home costing $20,000 more than a year ago for the same monthly mortgage payment.  With the strong housing stimulus, we are hopeful inventory will get trimmed and which will help prices stabilize in many areas by the end of the year."

Yun added, "Conditions have been aligning very favorably for home buyers with the exception of consumer confidence.  But I am hopeful that sales will turn around by late spring and early summer because history suggests that home sales can rise even in times of job losses when housing affordability rises."