What Tanking Home Sales Mean for the Recovery

Sales of existing homes dropped more than expected in January.

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While Newport argues that the tax credit will indeed juice home sales at bit, he doesn't expect a sustainable recovery to take hold until late this year. "Our forecast has sales dropping in the first quarter of 2010, payback from the first tax credit. Sales will take a second hit in the third quarter of 2010, payback from the second tax credit," Newport said in a report. "Later in the year, as the job market improves, we expect sales to start improving on a sustainable basis."