The latest report on pending sales has been made available, and it shows an easing for the second straight month. What does this mean for you? According to Lawrence Yun, National Association of Realtors' chief economist, While home buyers over the past two years have been exceptionally successful with historically low default rates, there is still an elevated level of shadow inventory of distressed homes from past lending mistakes that need to go through the system. We should not expect the recovery to be in a straight upward path – it will zig-zag at times.”

The largest decline was seen in the Midwest, where pending sales were down 7.3 percent in January. The West and Northeast also experienced declines, at 5.2 and 2.4 percent respectively. The South was the only region to see a pending home sales rise -- at 1.4 percent.

On the new home front, single-family sales declined as well.

Regionally, new home sales were quite the opposite from pendings. New-home sales declined 12.8 percent in the South and 36.5 percent in the West. The Northeast rose by an outstanding 54.5 percent and the Midwest jumped up 17.1 percent in January.

While poor weather conditions likely played a part in keeping potential buyers on the sidelines this January, we do expect consumer demand to improve somewhat along with job-market gains heading into the spring buying season, noted Bob Nielsen, chairman of the National Association of Home Builders (NAHB) and a home builder from Reno, Nev. However, with the already-thin inventory of new homes for sale continuing to decline and the consistent unavailability of construction credit, the question is whether builders will be able to meet the improving demand as it emerges.

Also troubling in the new home market are the tightened lending standards felt by many of the nation's builders.

With the spigot for housing production loans cut off, and the threat that the uncertainty from new rule-making under the Dodd-Frank financial services law will further impact the ability of small community lenders to service the credit needs of our industry, it is clear that congressional action is needed to help open the flow of credit to home builders, Nielsen noted.

The good news this week? The NAR reports that the pace of existing home sales, at 5.36 million, in January was higher than their forecast indicated for 2011. They note that if contract activity stays on its present course, there should be an 8 percent increase in total existing-home sales this year.

These figures point to a broader trend in the industry. Yun notes, “The housing market is healing with sales fluctuating at times, depending on the flow of distressed properties coming on the market.