Pending home sales fall sharply in month
1/6/2010WASHINGTON - The number of people preparing to buy a home in November fell sharply, the latest sign that the housing market, which had been rebounding strongly, may be headed for a "double-dip" downturn over the winter.
Consumers are taking their time following the extension of a tax credit deadline, and that is draining momentum from the summer's recovery, according to statistics yesterday from the National Association of Realtors.
The figures echoed what home builders saw in November and showed how dependent the housing market is on government programs to lower interest rates and lure buyers with tax credits. If those programs expire as planned early this year, the housing market will have to stand on its own.
But outside of housing, there are other signs the economy is climbing out of the recession. Orders to U.S. factories posted a big gain in November, the Commerce Department said yesterday. That data was the latest evidence of a strong turnaround in manufacturing as industries from China to Europe flash recovery signs.
Taken together, the reports show that, although housing remains vulnerable, makers of steel, computers, and chemicals are mounting a surprisingly robust rebound.
"We expect housing to just limp along even as the rest of the economy is growing fairly strongly," said Nomura Securities economist Zach Pandl.