(RTTNews) - Pending home sales fell by much more than expected in the month of November, according to a report released by the National Association of Realtors on Tuesday, with the decrease coming in the face of job losses and an eroding economy.

The report showed that the pending home sales index fell 4.0 percent to 82.3 in November from a downwardly revised reading of 85.7 in October. Economists had been expecting a much more modest decease by the index of about 1.0 percent.

Lawrence Yun, NAR chief economist, said, “Mounting job losses and very weak consumer confidence deterred home buyers from signing contracts in November.”

With the decrease, the pending home sales index is down 5.3 percent year-over-year, at its lowest level since the series began in 2001.

Yun added, “December’s housing market activity could be comparably lower due to ongoing problems in the economy, so a real estate-focused stimulus plan is urgently needed.”

The bigger than expected decrease in pending home sales reflected weakness in all four regions of the country. Pending home sales in the Northeast and Midwest fell by 7.2 percent and 6.7 percent, respectively, while pending home sales in the South and West fell by about 2 percent.

NAR noted that the impact of mortgage rates declining to near 50-year lows in December is not reflected in the November data.

Charles McMillan, NAR President said, “It’s crucial for Congress and the new administration to move quickly to remove impediments and offer home buyers the incentives they need to tap into today’s historic low mortgage interest rates.”

“NAR advocates expanding a $7,500 tax credit to all home buyers and eliminating the repayment feature, and permanently raising loan limits to bring down interest rates for many buyers in high-cost areas,” McMillan added.

A pending home sale is one in which a contract was signed but not yet closed. Normally, it takes four to six weeks to close a contracted sale.

In related news, the Federal Reserve Bank of New York announced Monday that it has begun purchasing fixed-rate mortgage-backed securities guaranteed by government-sponsored enterprises. The details of the purchases will be made available on Thursday, January 8th.

The data on the purchases will be updated on a weekly basis every Thursday, the New York Fed said in a statement. In addition, private investment managers will be acting on behalf of the New York Fed in these purchases.

This program was first announced on November 25, 2008 and “is intended to support the mortgage and housing markets and foster improved conditions in financial markets more generally,” the Federal Reserve said.

The U.S. central bank said that it would purchase up to $600 billion in mortgage-backed assets, the toxic assets that have been weighing down embattled GSEs like Fannie Mae (FNM) and Freddie Mac (FRE).

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Posted in Categories: Economy, Forex, Releases, USA.

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