Pending Home Sales Slump 16% in November

Congress has since then reinstated the $8,000 tax credit. It will be interesting to see if the index resumes its upward trend, now that buyers know that they can get the tax credit.

Here is a breakdown of sales by regions:

• In the Northeast, the index dropped 25.7% to 74.4 in November. However it was up 14.7% from a year ago.
• In the Midwest the index stood at 82, down 25.7%, but was up 9.2% from a year ago.
• In the South the index stood at 97.8, down 15%, but was up 14.7% from a year ago.
• The West fared better with the index at 124.8, down only 2.7%, but was up 21.4% from a year ago.

Overall, even though sales took a dip in November, the numbers are up an average of 15% from a year ago. We must remember that sales, even though up by an average of 15% are coming off a severe drop in 2008.

The activity does suggest the the $8,000 tax incentive is working and should push sales higher in the coming months, especially as the date of the end of the program nears. Buyers often wait until the last minute. It seems that the psychological "buy trigger" is activated closer to the end of the program.

If sales are up an average of 15% nationwide year on year, perhaps the bottom of the housing market was reached in 2009.

Do you believe that the 2009 marked the bottom of the housing slump?