post increase of 6.3 percent in Pending home sales

Buyers wade back into market as prices fall along with mortgage rates

An index that tracks signed contracts to purchase existing homes rebounded in December, as buyers snapped up properties at deep discounts, especially in the South and Midwest.

It was the second positive sign in the past two weeks for the troubled U.S. housing market, and may indicate that a bottom is forming — at least for home sales. Analysts, however, caution that prices are likely to keep falling through 2009, and say the outlook for home sales is uncertain, especially as layoffs mount and banks’ lending standards remain tight.

“Buyers are dipping their toes back into the housing market, but they have yet to really take the plunge,” wrote Joel Naroff, chief economist with Naroff Economic Advisors.