Home sales index records hefty gain

The Pending Home Sales Index, which measures signed sales contracts, increased 4.9% in December. It marks the largest gain in nearly three years, the Washington-based National Association of Realtors said today. The figure was the highest level for the index since June and is 4.4% lower than December 2005. The gain was the biggest since March 2004, when the index stood at 6.9%. Pending home sales increased in all four regions. The Northeast recorded an 8.1% increase. The West, South and Midwest recorded increases of 5.3%, 4.3% and 3.2%, respectively. David Lereah, chief economist at NAR, attributed the increase in contracts to mild December weather and a feeling among buyers that the market has bottomed out. "I expect modest sales gains throughout the year, with what I believe are sustainable levels of activity," he said in a press statement. "2007 promises to be the fourth best year on record."