Buying A Bargain Basement

Home hunters got some serious bargains as pending home sales in August jumped significantly.

Pending sales of existing U.S. homes unexpectedly jumped in August to the highest level in over a year, data from a real estate trade group showed on Wednesday.

The National Association of Realtors Pending Home Sales Index, based on contracts signed in June, rose 7.4 percent in August to 93.4 from an updwardly revised index of 87.0 in July.

The August reading was 8.8 percent higher than a year earlier, and the highest level since 101.4 in June 2007.

Economists polled by Reuters ahead of the report were expecting pending home sales to drop by 1.8 percent.

The association's senior economist Lawrence Yun said home buyers responded to improved affordability, with home prices low and mortgage rates down after the government takeover of Fannie Mae and Freddie Mac.

It's good news. It's not the bottom of the market, but at least people were buying in August. Now...September may be a different story again. Those home sales numbers boosted the Dow from its opening 200+ point drop into positive territory in the first hour of trading.

However that boost looks to be short lived, as the Dow is now back in the red.