<div><p>US existing-home sales plunged in December following a buyers' rush to take advantage of tax credits, industry data showed Monday, signaling a murky outlook for the troubled sector.</p><p>The National Association of Realtors (NAR) said sales fell 16.7 percent to a seasonally adjusted annual rate of 5.45 million units, while prices rose 1.5 percent year-on-year.</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 drop 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 that expands it to include other home purchases made prior to April 30.</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>The December existing-home sales number was 15.0 percent above the year-ago 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>"We?ll likely have another surge in the spring as home buyers take advantage of the extended and expanded tax credit."</p><p>First-time home buyers represented 43 percent of the market in December, compared with 51 percent the prior month.</p><p>The industry group noted that sales had risen every month since April, apart from a slight dip in August, and had often topped expectations.</p><p>For all of 2009, 5.156 million existing homes were sold, up 4.9 percent from 2008 and the first annual sales gain since 2005.</p><p>The national median sales price was 178,300 dollars in December, an increase of 1.5 percent from a year earlier. 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 troubled US 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 unemployment rate held steady at 10.0 percent in December while the economy shed 85,000 jobs, according to official data.</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>Total inventory of existing homes for sale at the end of December fell 6.6 percent to 3.29 million, representing 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, weighed down by sales of distressed homes, 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 198,100 dollars in 2008.</p><img src="http://admatch-syndication.mochila.com/images/ad.gif?aid=67765896&bid=informcom" /></div><div id="copyright"><div>

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