Pending home sales show continued improvement

The National Association of Realtors' Pending Home Sales Index continued to show gains in December, showing that the housing market may finally be gaining momentum.

The report said that the index, a measure of homes under contract that should be sold in the next few months, increased 2 percent during the month to 93.7. While that number was still 4.2 percent below the tax-credit fueled mark of 97.8 last December, economists were positive about the development.

"Modest gains in the labor market and the improving economy are creating a more favorable backdrop for buyers, allowing them to take advantage of excellent housing affordability conditions," said Lawrence Yun, NAR chief economist. "Mortgage rates should rise only modestly in the months ahead, so we'll continue to see a favorable environment for buyers with good credit."

Yun added that the continued affordability of homes should help the market grow to a healthy level of sales during 2011, as long as buyer demand continues to grow.

The trend of an improving housing market may be especially evident in the Houston real estate market, where jobs and affordability are both high. A recent report by Demographia listed Houston as one of the most affordable housing markets in the English-speaking world.