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Today, the National Association of Realtors (NAR) released its Pending Home Sales Report for December, showing continued improvement with the seasonally adjusted national index increasing 2.0% since November, but remaining 4.2% below the level seen in December 2009.

On a non-seasonally adjusted basis, the national index declined 19.8% since November and remained 3.6% below the level seen in December 2009.

Meanwhile, the NAR's chief economist, Lawrence Yun, appears to be smartening up and portraying the situation for housing with a bit more realistic outlook:

The latest pending sales gain suggests activity is very close to a sustainable, healthy volume of a mid-5 million total annual home sales. However, sales above 6 million, as occurred during the bubble years, is highly unlikely this year.

Frankly, the mere fact the the NAR now commonly refers to the period before 2006 as the "bubble years" is a notable improvement from the epic level of propaganda it was spinning during the worst of this ongoing housing decline.

Make no mistake: Housing still has a long way to go. Double dipping prices, shadow inventory, years more of foreclosures, the red-tape foreclosure process ... the market-clearing mechanisms are functioning, but this process will take some time to reach a discernible resolution.

The following chart shows the national pending home sales index along with the percent change on a year-over-year basis as well as the percent change from the peak set in 2005 (click for larger version).


Source: Pending Home Sales: December 2010