WASHINGTON (Reuters) - Pending sales of previously owned homes were unchanged in January, according to a better-than-expected reading from a real estate trade group report yesterday that points to the possibility of some stability for the beleaguered housing market.

The National Association of Realtors Pending Home Sales Index, based on contracts signed in January, held steady at 85.9. Economists were expecting pending home sales — which are a key gauge of future home sales activity — to fall by 1.0 percent.

NAR chief economist Lawrence Yun predicted that the volume of existing home sales will likely hold steady through late spring with a gradual recovery during the second half of next year, crediting higher mortgage loan limits for the expected improvement.

"This additional sign of a stabilising market is encouraging, and our members are telling us there's been a pick-up in shopping activity," said Yun.

But compared to a year ago, pending sales were down 19.6 percent and many analysts said it was too soon to call the market stabilising.

Regionally, pending home sales were down in both the Northeast and the South and they were up slightly in the Midwest and by 13 percent in the West.