(Thumbnail image: Long Island Business News)

Disappointing financial news Tuesday as pending home sales dropped 16 percent in November, as opposed to the expected 2 percent drop.  On-year numbers for pending home sales, however, stayed positive.  Pending home sales are seen as a better indicator of economic health than existing home sales, because they show the number of pending contracts to buy homes- a.k.a. interest in the housing market, instead of existing- completed homebuying contracts.

Media sources are debating why the number dropped and what this means for the housing market.  We’re looking at perspectives from FOX News, FOX Business, CNBC, and Daily Finance.

FOX News brings in a FOX Business reporter who gives her take on why the numbers dropped so sharply.

“...if you remember, during the final few months of 2009, we had that government incentive, the first-time home buyer tax credit that was really motivating buyers to come into the market.  And as of November, especially the beginning of November, there was some question of whether or not that would be extended past the deadline on Nov. 30.  As we know it, it was extended, but again that motivation was lost for some of the homebuyers that were potentially looking at getting into the market. Well they didn’t get into the market, John.”

But a different reporter on FOX Business says it’s all about buyer confidence.

“What they’re waiting for is economic stability because what we are getting in are mixed data.  You know some of it good, some of it not so good, and today is a perfect piece of evidence of that, with the factory orders, the good news, and the bad news was the pending home sales.”

Back to CNBC, where an economist is concerned about the health of the housing market.

“Housing is the big risk factor for the new year 2010.  The latest drop in the index of pending home sales, I should say plunge, reminds us that housing, perhaps, does not possess the wherewhithal to grow on its own.  That is, to grow without some support from the federal government.”

A columnist for Daily Finance says artificial or not, the housing sector needs the help its getting. 

“...the housing sector has endured such a slump that it benefits from all the buyer demand it can get -- organic, tax-credit induced or otherwise. If the tax credits can sustain the housing market until it can thrive again without them, it will be seen as a big success.”

So what’s your take on the drop in pending home sales? 

Writer: Newsy Staff

Producer: Newsy Staff