Pending home sales rise again in October

The National Association of Realtors just released data on pending home sales for October. A recap:

* Pending home sales rose 3.7%. That was much better than the 1% decline that economists were expecting.

* On a year-over-year basis, the pending sales index soared 31.8% to 114.1 from 86.6. That is the biggest annual increase on record and it leaves the index at a 43-month high.

* Regionally, sales climbed in three out of four regions. Sales rose 5.4% in the South, 11.6% in the Midwest and 19.9% in the Northeast. They fell 11.2% in the West.

The housing market continues to show signs of recovery. Pending sales easily topped estimates, with the index hitting its highest level since the waning days of the bubble in 2006. Also encouraging was the broad-based regional strength and the fact that sales held up despite the tax credit uncertainty pervading the market in October.

Moreover, there are reasons to expect the improvement to persist. Mortgage rates are falling again. Housing affordability is rising. And government support for the market looks like it'll continue until the proverbial cows come home. We can argue about the morality or wastefulness of those efforts until we're blue in the face. But the results are clear: They're helping to accelerate the recovery.

By the way, that recovery would have happened anyway because of falling home prices. Price declines are restoring affordability to a market that had gone mad. Or in simple terms: Falling home prices were never the problem here. They were always part of the solution.