Is it time to jump for joy or is this news a small silver lining to a still very dark cloud? That is the question of the day as NAR released their Pending Homes Sales Index.

For those of you not familiar with the Pending Homes Sales index, it is a forward-looking indicator for the housing sector, based on pending sales of existing homes. The index is based on contracts signed two months ago. These sales are listed as pending when the contract has been signed but the transaction has not closed, though the sale usually is finalized within one or two months of signing.

In April, the Index rose to 90.3, up 6.7 percent from the 84.6 that was posted in March, and is 3.2 percent more than April 2008 when it was 87.5. The rise in April was the third consecutive month that there was an uptick.

Lawrence Yun, NAR chief economist, said “Buyers are responding to very favorable market conditions. Housing affordability conditions have been at historic highs, but now the $8,000 first-time buyer tax credit is beginning to impact the market,” he continued. “Since first-time buyers must finalize their purchase by November 30 to get the credit, we expect greater activity in the months ahead, and that should spark more sales by repeat buyers.”

On a regional level, The Pending Home Sales Index shot up 32.6 percent to 78.9 in April in the Northeast and is 0.8 percent above a year ago. In the Midwest the index rose 9.8 percent to 90.4 and is 11.1 percent above April 2008. The index in the South slipped 0.2 percent to 93.0 in April but is 3.5 percent higher than a year ago. In the West the index rose 1.8 percent to 94.8 but is 2.9 percent below April 2008.

In other news, NAR’s Housing Affordability Index rose to 174.8 in April and was the second highest monthly reading on record after peaking at 176.9 in January of this year. The Housing Affordability Index is a broad measure of housing affordability using consistent values and assumptions over time, which examines the relationship between home prices, mortgage interest rates and family income; tracking began in 1970.

Click the video below to see the interview of Lawrence Yun, NAR chief economist, as he talks to Robert Freedman of Realtor Magazine about the latest Pending Homes Sales Index.