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That federal tax credit has been extended until the end of April, and Yun expects 2-point-4 million households to take advantage of it, bringing good news for people trying to sell their homes this year. While new-home sales will continue to simmer in 2010, Yun projects that 5.6 existing homes will be sold – a 9 percent increase over 2009. And Yun says those rising sales will bring stable prices back to the housing market as well.

Also this week, a new budget came from the Obama administration. The massive $3.8 trillion budget will reportedly push the nation’s deficit to a record $1.6 Billion, and the budget also is a mixed bag for home owners. On the plus side, there’s added emphasis on energy tax credits in which the government will provide tax credit for certain energy efficient home improvements. But also, the administration is looking at reducing the Mortgage Interest Deduction, which could cost homeowners serious money. We’ll be keeping a close eye on that issue.

First of all, you should know that the Pending Home Sales Index is a leading indicator for the housing industry – it tells us how well the market is expected to do in the months ahead. An index of 100 would be equal to the housing market activity in 2001, when this index began at the start of the most recent housing boom. It’s all relative, and now that you have that benchmark, let’s look at the how the index is faring in each region of the country.

We start in the Northeast, which enjoyed a 2 percent increase in December over November, and a 15-percent bump from a year earlier.

In the Midwest, the jump was higher – a 5 percent month-to-month increase, and a nine percent year-to-year increase.

In the South, Pending Home Sales in December rose two percent higher than November’s figure, and a 6 percent bump over the previous December.

And out West, we saw the index take a four percent hit from November to December. But index is still 19 percent higher than it was a year ago.

With the index heading in the right direction, the NATIONAL ASSOCIATION OF REALTORS® is expecting a strong year for existing home sales in 2010. Chief economist Lawrence Yun expects nearly 2 and a half million households to take advantage of the federal tax credit, and he believes that will result in 5.6 million existing homes to be sold this year - a nine point jump over 2009.

With the housing market moving again, this is no time for you to be watching from the sidelines. The spring selling season is almost here, so there’s no better time than right now for you to be working with a local REALTOR® and get in the game.

• 10: Purchase new windows! They not only add to the value of your house, they help you save money by keeping your home more energy efficient.
• 9: Bring your family room up to date, by adding enough room work out with the Wii! Get some exercise in your home theatre room — a feature potential buyers will love!
• 8: Spruce up the insides of your kitchen drawers by adding rollout trays and other organizers. Save some space, and make them more attractive to buyers.
• 7: Consider investing in a power generator, to keep the light on, when the electricity goes out!
• 6: Do a ‘floor space audit’ in your home. Look for square footage that isn’t being used, or used well, and try to put it better use. With some drywall and a bit of imagination, you can add a new room at little cost.
• 5: Add a deck! One of the best ways to add value is to create a brand new room outdoors! And just think, your grille will love you for it.
• 4: Upgrade your garage door opener to a keyless touchpad entry system to provide a bit of convenience and high-tech flair!
• 3: Fix up that basement. Whether you do a whole renovation or just a coat of paint, it make a big difference in the value of your home.
• 2: Consider using that attic space for more than just storage, by adding a room. You’ll see a big return on your investment, there.
• 1: Update your light fixtures – a small cost, for a big return!

If you can’t afford to put the addition on the house this year, you still have plenty of other options to beautify your home!

But fear not – A survey of REALTORS® across the country shows us that showing restraint can sometimes provide a bigger bang than going for broke. For example, the REALTORS® tell us that a mid-range kitchen upgrade will bring a 72 percent return on investment at re-sale, while a deluxe makeover brings back just 63 percent of the money spent on the project.

And you know how Grandma always said you never get a second chance to make a first impression? Well, Grandma was right. According to the REALTORS® survey, replacing your beat-up looking front door – the first thing a prospective buyer sees – is the single best investment your can make in fixing up your home.

One contractor in Virginia tells us he was able to extend a half-wall in a home office, add a door to the other end of the room, and for about four hundred dollars, create a new bedroom that added 40-thousand dollars to the sale price of the home. Another contractor in Arizona removed an unused wet bar out of a den, replaced it with a closet, and created a third bedroom for his client’s home. Projects like these can be done in a day, and provide years of pleasure for you and your family.

You never know what feature you might find in your home that can be expanded to provide more use, and therefore more value. One builder told us of the project he built using a cutout in the wall between his client’s kitchen and family room. By adding a granite countertop and a few stools, what had been a dead space turned into a breakfast bar.

Now, one thing we should mention. Not all, but a lot of these affordable remodeling ideas do require you to either be a skilled do-it-yourselfer or to use a professional contractor. That shouldn’t discourage you – Most of these ideas still will cost – at most – a few hundred dollars.

But if you’re thinking ‘Aha – the economy stinks, and I’ll be able to get someone to do this work dirt cheap’, then just remember – you usually DO get what you pay for. Contractors are anxious to get your business, but they won’t do it for free, and in fact, all of the projects we’re mentioning today cost more to do today than they did a year ago.

But again - the idea is to improve your home without draining your wallet, and sometimes it just comes down to thinking creatively. And if you find yourself falling a little short in that department, you can always pick the brain of your local REALTOR® – someone who has lots of experience in working with clients to maximize the value of their homes. And once you’ve come up a plan, many REALTORS® can also help refer you to the carpenters, electricians, plumbers and contractors who will turn your home improvement plans into reality.