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(CEP News) - An index looking at pending home sales in the U.S. picked up its pace of decline in November, the National Association of Realtors (NAR) reported on Tuesday.
U.S. pending home sales fell more than expected with a 4.0% decline in November. The index now stands at 82.3, below a downwardly revised 85.7 reading in October. The consensus from economists was for a 1.0% decline in the month. "Mounting job losses and very weak consumer confidence deterred home buyers from signing contracts in November," said NAR chief economist Lawrence Yun. "December's housing market activity could be comparably lower due to ongoing problems in the economy, so a real estate-focused stimulus plan is urgently needed." The index fell 2.2% in the South to a reading of 85.3 in November, but remains 16.4% below year-ago levels. In the Northeast, the index fell 7.2% to 63.2, but is 22.1% below November 2007. The Midwest index declined 6.7% to 74.2 in November and is 15.0% below a year ago. In the West, the index fell 2.4% to 101.2, but is 13.3% higher than November 2007. Yun suggested that a real estate-focused stimulus package could cause home sales to rise by more than 10% to 5.5 million in 2009, bringing stability to home prices around the country. "Stable home prices will, in turn, lessen foreclosure pressures and lay the foundations for a solid economic recovery as the nation's 75 million homeowners regain confidence," he said. The Pending Home Sales Index looks at home sales that have been signed but not finalized, a process that takes another month or two. The value of the index lies in its ability to forecast existing home sales, which represent eight-tenths of the market. By Stephen Huebl,
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