U.S. pending home sales rose in February from a record low a month earlier as buyers took advantage of deeply discounted prices and low interest rates. The National Association of Realtors (NAR) reported Wednesday that its index of pending sales of previously owned homes rose 2.1 percent in February from January's record low. Usually there is a one or two month lag between a contract and a finished deal, so the NAR index is seen as a gauge of future home sales. Because of declining home prices and mortgage rates, homeownership is more affordable than it has been since at least 1970, the NAR said. While home sales are still deeply depressed, hopes are growing that sales may be starting to increase. Sales of existing homes rose 5.1 percent in February, the biggest increase in almost six years. However, prices are expected to keep declining for at least another year. Tens of thousands of homes are in the foreclosure process and are not yet for sale. Additionally, as the recession deepens and job losses grow, many buyers are likely to delay buying homes. “We expect home sales to gain momentum in the second half of the year, with first-time buyers absorbing a lot of the excess inventory,” NAR chief economist Lawrence Yun said in a statement. “Under these conditions, we should see price stabilization in most markets by the end of the year.”
