The latest report from the National Association of Realtors indicates that pending home sales surged in August -- jumping 7.4 percent. This level is even higher than the August 2007 stats.

Lawrence Yun, NAR chief economist, said home buyers were responding to improved affordability. "What we're seeing is the momentum of people taking advantage of low home prices, with pending home sales up strongly in California, Nevada, Arizona, Florida, Rhode Island and the Washington, D.C., region," he said. "It's unclear how much contract activity may be impacted by the credit disruptions on Wall Street, but we're hopeful most of the increase will translate into closed existing-home sales."

Regionally, the West saw the biggest jump for the month of August -- surging 18.4 percent.

The only region that was still below August 2007 levels is the South.

Expert predict that home prices will finally begin to rise again -- by about 2 to 3 percent next year. This comes with prediction about 30 year fixed rate mortgages staying in the 6 percent range throughout 2009.