More Declines in the Housing Sector

The number of Americans signing contracts to buy previously owned homes fell more than forecast in November, signaling a further deterioration in housing.

The National Association of Realtors’ index of pending home sales dropped 2.6% to 87.6, after a 3.7% gain in October that was larger than previously estimated.  The figures underscore Treasury Secretary Henry Paulson’s forecast that the housing recession will continue, posing the biggest risk to economic expansion.  More stringent lending practices after the collapse in subprime lending and prospects that home prices will keep falling appear to be deterring buyers.

According to a survey of over 2,400 real estate agents nationwide, a third of planned home sales were canceled or delayed in September, October and November because of loan problems.  

Pending home resales are considered a leading indicator because they track contract signings. The group’s existing-home purchases report tracks closings, which typically occur a month or two later.

According to The Wall Street Journal, the Bush administration is considering tax rebates of about $500 for households and tax breaks for businesses to help the economy avoid a recession.

What do you think?  Would such a plan as $500 tax rebates make any real difference in the effort to fight off a recession?  We’d love to hear your comment by clicking the "Comment" link below and telling us what you think.  Your email address will not be displayed for your privacy and protection.