Pending home sales fall to eight-year low

Rising job losses and weak consumer confidence took a toll on home sales in November. The latest data, released today by the National Association of Realtors in Washington, shows the Pending Home Sales Index, which tracks contracts signed, fell to its lowest level since the trade group began tracking the stats in 2001. The index stood at 82.3, down 4% from October and down 5.3% from November 2007. Pending sales of existing homes fell 14.6% in the Northeast, 10.1% in the Midwest, 12.7% in the South and 19.3% in the West from the same month a year ago. “Mounting job losses and very weak consumer confidence deterred homebuyers from signing contracts in November,” Lawrence Yun, chief economist at NAR, said in a statement. He added that December’s sales activity could be “comparably lower.” Mr. Yun said a real estate-focused stimulus plan is desperately needed to jump-start home sales and stabilize home prices. “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 impact of mortgage rates declining to near 50-year lows in December is not reflected in the current data. The federal government needs to address the housing crisis for the economy to rebound, said Charles McMillan, NAR’s president and a broker with Coldwell Banker Residential Brokerage in Dallas-Fort Worth. “It’s crucial for Congress and the new administration to move quickly to remove impediments and offer homebuyers the incentives they need to tap into today’s historic low mortgage interest rates,” he said in a statement. NAR is calling on the government to expand a $7,500 tax credit to all homebuyers, eliminate the repayment feature, permanently raise loan limits to bring down interest rates for buyers in high-cost areas and unclog the mortgage pipeline.