Home-sale agreements plummet 16 percent nationally

The number of buyers who agreed to purchase previously occupied homes fell sharply in November, a sign sales will fall
this winter and possibly undermine the economic recovery.

The National Association of Realtors said Tuesday its seasonally
adjusted index of sales agreements fell 16 percent from October, to a November reading of 96. It was the first decline following
nine straight months of gains and the lowest reading since June.

The drop was far larger than the 2 percent expected
from economists surveyed by Thomson Reuters, and analysts were surprised.

"This was bound to happen at some
point, although not by this much," wrote a startled Jennifer Lee, senior economist with BMO Capital Markets. "Gulp,"
she added.

The report indicates consumers are taking their time following the extension of a tax-credit deadline.
The incentive of up to $8,000 for first-time buyers was set to expire at the end of November. But Congress pushed back the
date and broadened the program with a new credit of up to $6,500 for buyers who relocate.

"It will be at least
early spring before we see notable gains in sales activity as homebuyers respond to the recently extended and expanded tax
credit," Lawrence Yun, the Realtors’ chief economist, said in a statement.

Typically there is a one- to two-month
lag between a contract and a done deal, so the index is a barometer of future sales. Pending sales were down 26 percent from
October in the Northeast and Midwest, 15 percent in the South and 3 percent in the West.

The housing market had
been rebounding from the worst downturn in decades, aided by aggressive federal intervention to lower mortgage rates and bring
more buyers into the market. Home resales surged last month to the highest level in nearly three years.

But concerns
remain that the market recovery will stall as the federal programs are phased out.