NAR: Pending Home Sales Drop 2.6 Percent in November

Getting through the spin in any press release from the National Association of Realtors these days is tough, but the data reported by the realtor-led trade organization said Tuesday that pending home sales fell 2.6 percent in November, suggesting that the housing slump has yet to run its course. Bloomberg reported that the drop was far greater than economists had predicted; the median of 33 projections had most expecting the November reading of the index would fall 0.7 percent, following a previously-reported 0.6 percent October increase. In spite of the surprisingly large drop, NAR economist Lawrence Yun predicted that “a meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008.â€? The NAR currently forecasts that existing-home sales for 2007 will total 5.66 million, and then edge up to 5.70 million this year and 5.91 million in 2009. It’s worth noting, however, that the NAR has significantly lowered its expectations for new-home sales. One month ago, the organization forecast 788,000 new-home sales in 2007 and 693,000 in 2008. The NAR now said it expects new-home sales for 2007 at 773,000, dropping to 669,000 this year. The realtors’ forecast for housing starts remained unchanged, in spite of the projected drop in new-home sales. Once month after touting an improvement in pending home sales numbers for the Northeast region, the NAR’s Northeastern regional index reported that pending sales dropped 13 percent in November. Last month, the NAR’s Yun had said the “improvement in the Northeast reaffirms a trend apparent for some months now that shows signs of recovery, noteworthy because that was the first region to slump.” He did not offer a comment on the meaning of the large declining trend in today’s press statement, and whether or not his previous assessment of recovery in the Northeast still was valid.