<div><p>US existing-home sales plunged in December following a buyers' rush to snap up tax credits, industry data showed Monday, signaling a murky outlook for the ailing sector.</p><p>The National Association of Realtors (NAR) said sales fell a record 16.7 percent to a seasonally adjusted annual rate of 5.45 million units.</p><p>Though a decline had been widely anticipated, it was much sharper than the 5.9 million units expected by most analysts and was the steepest monthly drop since NAR began tracking the data series in 1999.</p><p>NAR said the falloff had been expected after sales surged from September through November as first-time buyers rushed to take advantage of federal tax credits originally due to expire on November 30.</p><p>Congress passed and President Barack Obama signed an extension of the first-time tax credit and expanded it to include other home purchases made prior to April 30, in an effort to spur a rebound in the housing market and support the economy's fragile recovery from recession.</p><p>It was unclear whether the second tax credit would jump-start sales overall or just bring them forward, said Patrick Newport, US economist at IHS Global Insight.</p><p>"So far, the second credit appears to be having a minimal effect," he said, adding that mortgage applications to purchase homes on a four-week moving average were near their lowest level since 1997, despite historically low mortgage interest rate levels.</p><p>First-time home buyers represented 43 percent of the market in December, compared with 51 percent the prior month.</p><p>Sales were 15.0 percent above the December 2008 level, the industry group said.</p><p>"It?s significant that home sales remain above year-ago levels, but the market is going through a period of swings driven by the tax credit," said Lawrence Yun, NAR chief economist.</p><p>Sales rose every month since April, apart from a slight dip in August, bringing 2009 sales to 5.156 million, up 4.9 percent from the prior year and the first annual sales gain since 2005.</p><p>The national median sales price rose 1.5 percent from a year earlier to 178,300 dollars. It was the first year-over-year gain since August 2007.</p><p>"The best development for the future of housing is to see prices rise," said Robert Brusca at FAO Economics. "Nothing will bring people back to housing like the notion that prices are firming up."</p><p>Yun highlighted that elevated unemployment poses a key challenge to recovery in the housing sector, where defaults on subprime mortgages more than two years ago triggered the global financial crisis.</p><p>"The job market remains a concern and could dampen the housing recovery -- job creation is key to a continued recovery in the second half of the year," the NAR economist said.</p><p>The home sales report came as Obama unveiled a series of tax breaks and other measures to ease pressures on the embattled middle class.</p><p>"Creating good, sustainable jobs is the single-most important thing we can do to rebuild the middle class and I won't rest until we're doing just that," said the president ahead of his State of the Union address to Americans Wednesday.</p><p>Most economists expect the unemployment rate -- which held steady at 10.0 percent in December -- will remain high amid a sluggish economic recovery.</p><p>"Job growth, low rates, and better access to liquidity will be all needed to keep the housing market recovering," said Andrew Busch at BMO Capital Markets.</p><p>Inventory of existing homes for sale at the end of December fell 6.6 percent to 3.29 million units, a 7.2-month supply at the current sales pace, up from a 6.5-month supply in November.</p><p>On an annual basis, inventory at the end of December was 11.1 percent below the December 2008 level. It was at the lowest level since March 2006, when the housing price bubble began to collapse, and 28.2 percent below the July 2008 record overhang.</p><p>Median prices fell under the weight of distressed home sales, which accounted for 36 percent of total sales last year.</p><p>For all of 2009, the median price was 173,500 dollars, down 12.4 percent from a year earlier.</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=67765897&bid=informcom" /></div><div id="copyright"><div>

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