According to the National Association of Realtors (NAR) Pending Home Sales Index (PHSI), pending home sales jumped a little bit higher during the month of December by 2% in a monthly comparison.

The Pending Home Sales Index reflects only contracts NOT closings, making the index and indication of what home sales should look like in the future.

According to Lawrence Yun, Chief Economist for NAR, In the past two years, homebuyers have been very successful, with super-low loan default rates, partly because of stable home prices during that time. That trend is likely to continue in 2011 as long as there is sufficient demand to absorb inventory, the latest pending sales gain suggests activity is very close to a sustainable, healthy volume of a mid-5 million total annual home sales. However, sales above 6 million, as occurred during the bubble years, is highly unlikely this year.