Home Sales Slide

They were down 16% in November.

So much for Summer's tepid recovery.

No matter how many trillions of dollars of subsidies and low interest rates that the federal government throws at the declining housing market, it keeps going down.

Perhaps we should let it find its own level?

The Los Angeles Times says:

The National Association of Realtors said Tuesday its seasonally adjusted index of sales agreements fell 16 percent from October to a November reading of 96. It was the first decline following nine straight months of gains and the lowest reading since June.

The drop was far larger than the 2 percent expected from economists surveyed by Thomson Reuters, and analysts were surprised.

"This was bound to happen at some point, although not by this much," wrote a startled Jennifer Lee, senior economist with BMO Capital Markets. "Gulp," she added.

The report indicates consumers are taking their time following the extension of a tax credit deadline. The incentive of up to $8,000 for first-time buyers was set to expire at the end of November. But Congress pushed back the date and broadened the program with a new credit of up to $6,500 for buyers who relocate.

"It will be at least early spring before we see notable gains in sales activity as homebuyers respond to the recently extended and expanded tax credit," Lawrence Yun, the Realtors' chief economist, said in a statement.