November home sales were down nationwide from the previous month because buyers in October were racing to beat the anticipated expiration of the tax credit which was worth $8,000 toward the first time purchase of a home.

The National Association of Realtors’ seasonally adjusted index of pending home sales dropped 16% — from 114.3 in October to 96 in November — ending nine months of gains. Economists had expected only a two percent drop.

Congress has since extended the credit through the end of April and broadened to include $6,500 for buyers who relocate.

Though the index remains above same month last year that’s hardly encouraging since November 2008 was the depth of pessimism in the marketplace. Buying a home in November 2008 required a leap of faith in the economy. In Houston, which was still recovering from the effects of Hurricane Ike, sales were especially depressed last year.

Since most pending sales close within six to eight weeks, the index’ current drop is considered a harbinger of where the market is headed.

When the home buyers’ tax credit expires in April the housing market will have to stand on its own.  Some observers wonder whether it can.

With a quarter of all homeowners under water — they owe more than their home is worth — some will simply walk away, further weakening the market unless the Administration creates more artificial stimulus to maintain values. That’s a possibility in an election year.