WASHINGTON — An index that tracks signed contracts to purchase existing homes rebounded in December, as buyers snapped up properties at deep discounts, especially in the South and Midwest.

It was the second positive sign in the past two weeks for the troubled U.S. housing market, and may indicate that a bottom is forming — at least for home sales.

Analysts, however, caution that prices are likely to keep falling through 2009, and say the outlook for home sales is highly uncertain, especially as layoffs mount.

The National Association of Realtors said Tuesday its seasonally adjusted index of pending sales for previously owned homes for December rose 6.3 percent to 87.7 from an upwardly revised November reading of 82.5, which was lowest month on record. That's better than the 82.3 reading economists expected, according to a survey by Thomson Reuters.

The reading also was up 2.1 percent from December 2007.

Typically there is a one- to two-month lag between a contract and a done deal. Home sales that were pending in December are likely to be completed in the coming weeks.

After the stock market crashed last fall, sales of existing homes plunged in October and November, but recovered in December. Tuesday's pending home sales report indicates January sales data, to be released later this month, may look good, too.

Pending home sales increased about 13 percent in the South and Midwest, but fell almost 4 percent in the West and about 2 percent in the Northeast.

The Realtors group, normally known for its optimistic view of the housing market, is now cautioning against getting too enthusiastic about any recovery — as the group lobbies hard for new government tax credits to boost home sales.

"Significant uncertainty still clouds the housing market despite improved affordability conditions," Lawrence Yun, the group's chief economist, said in a statement.

"For a sustainable housing market recovery and, hence, sustainable economic recovery, we need a significant housing stimulus."