The volume of contracts to purchase previously-owned US homes slid more than the November forecast, as Americans waited for first-time buyer tax credit to be extended.
According to the National Association of Realtors, the pending home sales index or signed purchase agreements dropped 16 percent after a revised 3.9 percent gain in October that was more than the initial report. It was the first drop in ten months.
The figure showed the risk of faltering housing when home buyer incentives, which were extended in November, expire later this year. Weaker consumer finances and unemployment, close to a 26-year low, remain as hindrances to a sustained acceleration in home sales that would help drive the economy.
“There will be a couple of months where you’ll see noticeable weakness in home resales,” said Chief US Economist Joshua Shapiro of Maria Fiorini Ramirez Inc. “I don’t expect the trajectory we’ve seen over the past three to six months to be maintained.”
Sales were expected to fall by 2 percent after an originally reported 3.7 percent October gain. Estimates ranged from a drop of 12 percent to a 3.9 percent increase.
According to the property group, pending sales were up 19.3 percent, compared to November 2008.
All four US regions reported decreases in November, led by 26 percent declines in the Midwest and Northeast. Pending sales slid 2.7 percent in the West and 15 percent in the South.
Pending home sales are the leading indicator that tracks contract signings. The association began publishing the index in March 2005.