Golden Sun eXtra Your Local News Source, Mohave County, AZ

In December, sales of previously occupied homes took the largest monthly drop in more than 40 years, sinking more dramatically than expected after lawmakers gave buyers additional time to use a tax credit. The report reflects a sharp drop in demand after buyers stopped scrambling to qualify for a tax credit of up to $8,000 for first-time homeowners. It had been due to expire on November 30. But Congress extended the deadline until April 30 and expanded it with a new $6,500 credit for existing homeowners who move.

December's sales fell 16.7%, the National Association of Realtors said Monday. Sales had been expected to fall by about 10%, according to economists. Sales are now up 21% from the bottom a year ago, but down 25% from the peak more than four years ago. The median sales price was $178,300, up 1.5% from a year earlier and the first yearly gain since August 2007. However, some of that increase could be due to a drop-off in purchases from first-time buyers who tend to buy less expensive homes.

The big question hanging over the housing market this spring is whether a tentative recovery will stumble after the government pulls back support. The Federal Reserve's $1.25 trillion program to push down mortgage rates is scheduled to expire at the end of March -- a month before the newly extended tax credit runs out.

Many experts project home prices, which started to rise last summer, will fall again over the winter. That's because foreclosures make up a larger proportion of sales during the winter months, when fewer sellers choose to put their homes on the market. Despite fears that home prices are starting to fall again, some analysts still believe the worst is over.

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