The latest reports indicate that pending home sales are down by around 4.6 percent from last month.

Despite this drop, this number is still higher (1.6 percent) than last year at the time reported.

The chief economist for the National Association of Realtors, Lawrence Yun, projects growth in the U.S. gross domestic product (GDP) to contract in the fourth quarter of this year and the first quarter of 2009, before expanding in latter part of 2009 as home sales recover. "Right now we’re in a recession and unemployment will increase through 2009," he said. "Consumer spending has halted and businesses are very cautious of expanding. It is unclear by how much the global economic slowdown will dampen U.S. exports, which had been rising strongly."

"The depth of the recession depends entirely on housing – with sufficient housing stimulus, the recession will be shallow. If government actions stay focused on housing, the cost to the Treasury would be much less that the potential losses in the nation’s output and income in a severe recession."