Just today the pending home sales show a sustained uptrend, rising for the fourth month in a row, from our very favorable housing affordability and a first-time buyer tax credit boosting activity, according to the National Association of Realtors®.

The Pending Home Sales Index based on contracts signed in May, increased 0.1 percent from an upwardly revised reading in April, and is 6.7 percent higher than May 2008. The last time there were four consecutive monthly gains was in October 2004. Wow, this market is really heating up. And if you haven't already jumped in to get your deals, you need to do that NOW.

Regional Breakdown:
Northeast rose 3.1 percent May over April and is 6.8 percent above May 2008.
Midwest slipped 1.3 percent May over April, but is 11.4 percent above May 2008.
South declined 1.7 percent May over April, but is 7.9 percent higher than May 2008.
West rose 2.2 percent May over Apri, and is 0.7 percent above May 2008.
NAR’s Housing Affordability Index remains at historic highs. The affordability index fell to 171.6 in May from an upwardly revised 178.8 in April, which was the highest on record dating back to 1970. “Under these conditions the typical family would devote only 14.6 percent of gross income to mortgage principal and interest, which is one of the lowest percentages on record,” Yun said.
A median-income family, earning $60,800, could afford a home costing $296,700 in May with a 20 percent downpayment, assuming 25 percent of gross income is devoted to mortgage principal and interest. Affordability conditions for first-time buyers with the same income and small downpayments are roughly 80 percent of what a median-income family can afford. The affordable price was significantly higher than the median existing single-family home price in May, which was $172,900.

The first-time buyer tax credit also is benefiting the market. “Strong activity by entry level buyers is helping to absorb inventory and allow some existing owners to make a trade,” Yun said.

Pending home sales is a forward looking report. Therefore you should see existing-home sales continue to trend up through the rest of the year. Even with all the new foreclosures hitting the market, with builders not building, supply is shrinking. In some parts of the country, like California, housing supply is less than a 4 month supply.
La Quinta, Palm desert and Rancho Mirage have wonderful opportunities. Homes can be bought from $56 per square foot!!!!
I know I am buying and you are invited to become involved in the investment aspect of single family homes. Visit www.financeweb.com to see what I am planning.