Positive news on housing and real estate keep rolling in -- thanks in large part to federal home purchase tax credits and continuing near-record low mortgage rates.

Last week's pending home sales report from the National Association of Realtors illustrates the trend: Pending contracts jumped for the third straight month -- up by six percent in April -- and now stand 22 percent higher than the year before.

Every region but one -- the South -- racked up sizable gains in transactions heading for settlement. Contracts in the Northeast were up by nearly 30 percent for the month. In the West, they rose nearly eight percent, and in the Midwest the gain was about four percent.

The South's pending sales were less than one percent off from the previous month, but are still an impressive 31 percent above where they were 12 months before.

Home prices also appear to be moving on an upward curve, according to the latest Clear Capital Home Data Index -- which tracks price movements in thousands of local markets and Zip codes.

Clear Capital's national report for the month of May found prices up by 6.8 percent year over year.

Consumer confidence is definitely powering some of these sales and price numbers, economists say. The Conference Board's index for consumer confidence in May rose by five points -- a good sign for consumers' willingness to spend money.

Lynn Franco, who directs the Conference Board's survey research center, noted that the "expectations" component of the index was particularly strong -- and is now at its highest point in nearly three years.

According to Franco, consumers' previous fears about the job market, incomes and the overall economy have been on the decline for a couple of months now.

Meanwhile, mortgage giant Fannie Mae released its latest economic projections for the rest of the year. Chief economist Doug Duncan says he sees a "self-sustaining economic recovery" gradually taking shape -- again good news for housing.

Of course, not all the latest numbers on real estate are upbeat. They never are. Now a closely watched index tied to likely new home purchase offers two to three months down the road has gone negative. The Mortgage Bankers Association's index of new loan applications declined again for the third straight week, and now is at its lowest point in 14 years.

What's going on here? Most likely its the tax credits. The April 30 deadline for signed contracts for the two tax credit programs -- and the phaseout of the entire credit program June 30 -- are definitely pushing loan applications down.

As we said last week, the credits -- which are part of the federal stimulus efforts -- pushed many purchasers to move up their transactions to the first half of the year. Lawrence Yun, chief economist for the National Association of Realtors, says the underlying strength of the economic recovery should allow sales and loan applications to recover in the second half, without any need for additional federal help.

Published: June 7, 2010

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Kenneth R. Harney writes an award-winning, nationally-syndicated column on housing and real estate from Washington, D.C. He is also managing director of the National Real Estate Development Center, a professional education company. He is a past member of the Federal Reserve Board's Consumer Advisory Council, a committee that by federal statute reviews all Fed actions on home mortgage, consumer credit and banking industry regulation. He served as a member of the U.S. Department of Housing and Urban Development's Working Group on Computerized Loan Origination (CLO) systems, and is a member of the Editorial Board of the Fannie Mae Foundation's journal, Housing Policy Debate. He is the author of two books on mortgage finance and real estate.