The National Association of Realtors' Pending Home Sales Index (PHSI) rose for the fifth time in six months in December, albeit at a slower rate than in November, which was downwardly revised.

The PHSI increased 2% to 93.7 based on contracts signed in December from 91.9 in November, which was taken down from 92.2. Wall Street was expecting an increase of 1%. The index remains 4.2% percent below the 97.8 mark logged in December 2009.

Regionally, the index in the Northeast rose 1.8% to 73.9, 5.3% below December 2009. In the Midwest the index rose 8.0% to 84.6, 5.1% below a earlier. The South jumped 11.5% to an index of 101.9 and was 1.7% above December 2009. The West fell 13.2% to 105.8, 10.75 below a year ago.

Lawrence Yun, the NAR's chief economist, said, "Modest gains in the labor market and the improving economy are creating a more favorable backdrop for buyers, allowing them to take advantage of excellent housing affordability conditions. Mortgage rates should rise only modestly in the months ahead, so we'll continue to see a favorable environment for buyers with good credit."

He continued, "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."