Does a Drop in Home Sales Portend a Double-Dip?

The housing market broke its lucky streak with a depressing report from the National Association of Realtors.

The number of people with signed contracts to buy a home was down 16 percent in November compared to October. Sixteen percent! Suddenly the media - ABC News, the New York Times, etc. - is talking about a "double-dip" downturn for housing with falling prices again this winter.

Is this the beginning of another horrible winter for housing?

A little perspective always helps. The pending home sales index dropped to 96 in November, down from 114.3 in October. But that October number was incredibly high. It almost beat the all-time high of 115.2 the index set in March 2006, at the height of the housing boom.

Since we're no longer in a housing boom, no one expected the index to stay up there. Most economists expected the index to fall by a few points, according to the market consensus at Yahoo Finance.