The National Association of Realtors' (NAR) pending home sales index (PHSI) rose 3.7% in October and posted its ninth consecutive monthly gain.

The index, considered a leading indicator of future sales, hit 114.1 in October, compared to 110.1 in September. The PHSI has risen 31.8% since October 2008.

The upward trend reflects the success of the $8,000 first-time homebuyer tax credit, said NAR chief economist Lawrence Yun.

"This means the tax credit is helping unleash pent-up demand from a large pool of financially qualified renters, much more than borrowing sales from the future," Yun said.

However, the NAR is expecting a dip in sales in the months ahead followed by a surge in early spring. Their economists are forecasting that 2010 existing home sales will come in at 5.7 million, up 10.8% from this year.

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