Rocked by four dollar per gallon gas, rising unemployment to 5.5 percent and a steep stock market decline, the nation is ready for some good news, and it just might come from the housing sector.

The National Association of Realtors April Pending Home Sales Index stopped its nearly three-month slide, and rose 6.3 percent to a reading of 88.2. That's still well off the 101.5 reading in April 2006, but significantly better than the March 2008 index of 83.

The rise in pending home sales, which is a forward-looking index, tracks the number of pending home sales, determined by purchase contracts signed. A major reason why sales are improving is that prices are better, driven largely by bank foreclosures. The Mortgage Bankers Association reported that first-quarter delinquency rates jumped 6.35 percent from 5.82 percent in Q4 '07. Delinquency rates are the highest since 1979, encouraging bankers to make more deals, particularly in areas with double-digit price declines.

According to a different NAR index, housing affordability has improved dramatically as home prices have dropped 8.4 percent in 2008. More buyers turn to conforming loans, and conforming jumbo loans which are slightly easier to obtain.

Other factors improving the market are better rates on jumbo loans. And, more buyers are turning to conforming loans. In April, there were over 9,000 (9,146) conforming loan applications per work day, a huge increase over just under 8,000 (7,957) per day in March.

Buyers are looking for deals while prices are lower, credit standards are improving, and interest rates are still low. They may realize that this unique window of prices rolled back to 2004, 20-year high inventories and suppressed mortgage interest rates won't last.

Interest rates are certain to rise, as continuing inflation worries impact lending rates. The NAR expects mortgage interest rates to rise to 6.3 percent for a 30-year, fixed rate for qualified buyers.

Home sellers won't feel like partying quite yet. Lender foreclosure fire-sales are causing home prices to remain low, and many buyers are still waiting for even lower prices as foreclosures continue to flood the market.

The good news is that some bargain homes are finally moving through the system. Pent-up demand may keep the momentum going.