width=293WASHINGTON - Pending sales of previously owned homes edged up as expected in December, a survey showed on Tuesday, which should help to calm fears of renewed weakness in the troubled housing sector.

But the housing recovery remains slow and painful, with other data showing the percentage of empty privately owned homes rose to 2.7 percent in the final three months of 2009 from 2.6 percent in the third quarter.

The National Association of Realtors's Pending Home Sales Index, based on contracts signed in December, rose 1.0 percent to 96.6 after falling sharply in November when a boost from the initial tax credit for first-time buyers ebbed.

Analysts polled by Reuters had forecast pending home sales, which lead existing home sales by one to two months, would rise 1 percent. Compared to December 2008, the index was up 10.9 percent.

The tax credit, which had been scheduled to end in November, was expanded and extended until June. Its expected expiry had pushed down sales of existing homes in December, when they dropped to their slowest sales pace in four months.

We expect pending home sales to improve, suggesting a positive outlook for the existing home sales market. We continue to believe that the U.S. housing market recovery remains intact, said Ian Pollick, economics strategist at TD Securities in Toronto.

U.S. stock indexes fell slightly, while Treasury debt prices and the dollar were little changed.

A raft of weak housing reports for December had fanned worries that the housing market, at the center of the worst economic downturn since the Great Depression, could take a step back and harm the broader economic recovery.

Further signs that the housing market is struggling came in the Commerce Department's data on Tuesday showing the rise in vacancies in the last quarter of 2009. The rate has risen for the last two quarters.

However, the Realtors group said the tax credit was skewing housing data and the market remained on a firm recovery path.

There are easily understood swings in contract activity as buyers respond to a tax credit that was expiring and was then extended and expanded, Lawrence Yun, the group's chief economist. These swings are masking the underlying trend, which is a broad improvement over year-ago levels.

(Reporting by Lucia Mutikani and Mark Felsenthal; Editing by Chizu Nomiyama)