MORE INCOME SPENT TO KEEP HOME PENDING SALES HAVE STRONG GAIN.

Byline: GREGORY J. WILCOX Staff Writer

Pending home sales, a leading market indicator, made a surprisingly strong gain in July, suggesting that the housing slump might be moderating, the National Association of Realtors said Monday.

The association's Pending Home Sales Index, based on contracts signed in August, rose 4.3 percent to a level of 110.1 from a reading of 105.6 in July. But it is still 14.1 percent lower than August 2005.

An index of 100 is equal to the average level of contract activity during 2001, the first year to be examined, and was the first of five consecutive record years for existing home sales.

A sale is listed as pending when the contract has been signed and the transaction has not closed. The sale usually is finalized within a month or two of signing.

``It's certainly positive news but it's coming off a large decline in July,'' said Lawrence Yun, a senior economist at the association.

``It implies there may be a few more months of weak housing figures but perhaps this is the first sign of some stabilization.''

That would mean while sales might continue falling from their year-ago levels, the declines won't be as steep as in past months.

The index is a leading indicator for the housing sector, based on pending sales of existing homes.

The West has the biggest PHSI increase in the nation, 9.2 percent, down 16.9 percent from a year ago.

The Midwest did not gain any ground from July and fell 20.4 percent from a year ago.

The same trend emerged in the San Fernando Valley, according to numbers, rather that a statistical model, tracked by the Van Nuys-based Southland Regional Association of Realtors.

During August pending sales increased 12.2 percent from July and fell 29.5 percent from their year-ago level. Sales first declined on an annual basis last October and the year-over-year decline eventually mirrored August's annual dip in pending sales.

``I think things are beginning to stabilize or level off,'' said Jim Link, the association's executive vice president.

Sales are not expected to increase anytime soon, but they won't continue falling off a cliff, either, he said.

Daniel Blake, director of the San Fernando Valley Economic Research Center at California State University, Northridge, also noted that interest rates have been coming down a bit, which could account for the uptick in pending sales.

``That could have enticed some people back into the market,'' he said.

greg.wilcox(at)dailynews.com

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