Pending Homes Sales Fall To Lowest Level On Record

January 6, 2009 10:52 a.m. EST

Washington, DC (AHN) - The National Association of Realtors (NAR) reported Tuesday its Pending Home Sales Index fell 4 percent in November to 82.3, marking the lowest reading since the index began in 2001.

The November result is 4.6 percent lower than the November 2007 reading of 86.9.

The NAR said a drop was inevitable due to the current economic slump.

"Mounting job losses and very weak consumer confidence deterred home buyers from signing contracts in November," said Lawrence Yun, NAR chief economist in a press release.

"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," he added.

Yun also believed a rebound in the housing market would largely depend on government stimulus.

"With a proper real-estate focused stimulus measure, home sales could rise more than expected, by more than 10 percent to 5.5 million in 2009," said Yun.

The NAR's sales index showed the most weakness in the Northeast where pending sales dropped 7.2 percent in November and are down 14.6 percent from November 2007.

The Midwest saw a 6.7 percent sales drop in November and is down 10.1 percent year-over-year.

The drop-off in the South and West regions were not as severe, off 2.2 percent and 2.4 percent, respectively.

Year-over-year sales in the South are down 12.7 percent. The West region has been able to buck the trend, remaining 19.3 percent higher from last year despite the November decline.

The NAR said 30-year fixed mortgage rates should hold fairly steady through the first half of 2009.