Pending Home Sales Fall in December

The pending home sales index, based on contracts signed but not closed in December, was down 24.2% from the prior year's period, according to a report from the National Association of Realtors (NAR). The index, which is considered a leading indicator of existing home sales, had also declined in November, after gains in September and October.

Ian Shepherdson, chief U.S. economist with High Frequency Economics, said it's not likely that the index has hit bottom. He says "Consumer confidence has weakened further, the rate of fall of home prices has accelerated and the labor market has deteriorated, so we are of the view that the outlook for housing continues to darken."

The aggregate existing-home price is expected to drop 1.2% this year, according to NAR.  NAR sees new-home sales likely declining 17.7% this year, and then rising 7.6% in 2009.

By region, December's pending home sales index fell 1.7% in the Northeast, 3.0% in the South and 3.1% in the West. In the Midwest, the monthly index rose 3.4%. Compared with a year ago, the index is down across the country.