US home sales slump to new low

Staff Reporter Wednesday, 7 Jan 2009 1 minute read

Pending home sales in the United States have fallen to their lowest level in seven years and a further weakening appears inevitable as the economy faces rising job losses and negative growth.

According to the National Association of Realtors’ (NAR) Pending Home Sales Index, contracts signed for home sales in November last year fell 4 per cent to an index reading of 82.3. This compared to 86.9 in November 2007 and was the lowest reading since the index began in 2001.

NAR chief economist Lawrence Yun said a real estate focused stimulus plan was urgently needed to help offset mounting job losses and weak consumer confidence threatening further weakness in the market.

Meanwhile minutes released overnight from the Federal Reserve’s December interest rate meeting signal that the US recession could drag on well into 2009.

In the minutes, explaining their decision to cut rates to near zero, Fed officials conceded the economic outlook would “remain weak for a time and the downside risks to economic activity would be substantial”.