The pending home sales index rose in June. The increase is a welcome development for the troubled housing market. The National Association of Realtors’ seasonally adjusted index increased 5.3 percent to 89 from May’s revised reading of 84.5.

The June index was 12 percent below of the June 2008 reading. Home sales are considered pending when the seller has accepted an offer, but the deal has not yet closed. Typically there is a one- to two-month waiting time before a sale is completed.

Last month, the Realtor group said completed sales of existing homes fell more sharply than expected in June, pushing activity down to the lowest level in more than a decade. Many analysts predict home prices will keep falling until at least next spring as tighter credit, a weaker job market and rising foreclosures scare potential buyers away.

Still, the NAR predicts a package of housing legislation signed by President Bush last week — particularly a $7,500 tax credit for first-time homebuyers — will aid a recovery.

"With a tax credit now available to first-time home buyers, increases in home sales could be sustained with the momentum carrying into 2009," Lawrence Yun, the group's chief economist, said in a statement.