The NAR put out its pending-home sales index yesterday, which showed that pending sales in July were off 8.6 percent from year-ago levels, but up 5.0 percent from the a revised June reading. The monthly gain represents the best month-to-month performance in more than three years. Regular HW readers will know I don’t put alot of faith in monthly comparisons, even seasonalized — so here’s the YOY trending for pending home sales: Jan 2007: -8.9 Feb 2007: -8.5 Mar 2007: -10.5 Apr 2007: -10.2 June 2007: -13.3 July 2007: -8.6 July is certainly a very encouraging improvement over the March – June period, which has given some analysts hope that the housing market might be readying for a turnaround. The NAR characterized the results as an indication that “the [housing] market is likely to stabilize in the months ahead,” and Frank Nothaft at Freddie Mac today cited a similar hope in discussing mortgage rate trends. While I certainly share in that hope, what the index doesn’t really capture is the supply-side of credit availability. If Alt-A credit, 100 percent CLTV, stated income, etc. feels a credit squeeze anything akin to what’s taken place in subprime — and there is certainly some evidence at this point to suggest that may be the case — it’s possible that a chunk of prospective new-home buyers will find their loans (poof!) re-priced out of the market. Sort of like magic.