Pending U.S. home sales fall 16% in November

January 5, 2010 by · Leave a Comment
Filed under: Real Estate News 

With the home buyer tax credit extended this does not bode well for a recovery in the U.S. real estate market.   We still have a “shadow inventory” of homes that are not on the market, waiting for sales to pickup.  Banks will eventually have to mark down these homes even more and that will strain their balance-sheets.  The first two quarters of 2010 will be very telling to see if we are in fully swing recovery or a double-dip in 2010.

A forecasting gauge of housing-market activity slid more than expected in November, the result of an earlier surge caused by buyers racing to close deals ahead of the initial expiration of a government tax-credit program.

The National Association of Realtors’ index for pending sales of previously owned homes plunged 16% to 96.0 in November from an upwardly revised 114.3 in October, the industry group said Tuesday.

Separately, demand in the U.S. factory sector during November exceeded expectations, according to data that signaled healthy capital spending by businesses and indicated the recovery in manufacturing is intact.

The decline is the first in 10 months and is more than triple that expected by analysts surveyed by Dow Jones Newswires. Those analysts had expected pending sales would fall by just 5.0%.

The Realtors are expecting pending home sales to increase as a result of the government’s recent extension of its homebuyer tax credit program. But, “it will be at least early spring before we see notable gains in sales activity,” NAR Chief Economist Lawrence Yun said.

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