WASHINGTON - Pending U.S. home sales dipped in November, a trade group for real estate agents said Tuesday, but it expects the sales pace to pick up significantly in the second half of 2008.

In another indication that the housing market's struggles aren't finished, the National Association of Realtors said its seasonally adjusted index of pending sales for existing homes fell 2.6 percent to a reading of 87.6 from an upwardly revised October index of 89.9.

Analysts warned of continued calamity in the ailing U.S. housing market.

"The best thing you can say about pending home sales is that they aren't getting much worse," Mike Larson, a real estate analyst at Weiss Research in Jupiter, Fla., said in a statement. But with the labor market weakening, "you have the recipe for ongoing trouble in housing," Larson said.

In a speech on Tuesday, the head of mortgage finance company Fannie Mae, chimed in with a pessimistic note. Chief Executive Daniel Mudd said home prices would "perhaps begin to gain modestly" in 2010.

Fannie Mae's shares fell $2.57, or 7.5 percent, to $31.66 in midday trading, as Wall Street worried about more mortgage troubles, particularly at Countrywide Financial Corp., the No. 1 U.S. mortgage lender.

The Realtors index, which was down 19.2 percent from a year ago, hit a record low of 85.5 in August at the peak of the worldwide credit squeeze.

Typically there is a one to two-month lag between when a buyer signs a home sales contract and the closing of the deal. Sales completed last month and into this month should be reflected in the November reading.

An index reading of 100 is equal to the average level of sales activity in 2001, when the index started.

The Realtors group also projected U.S. existing home sales would increase 0.9 percent this year to 5.7 million, up from a projected 5.65 million last year.

Final results for U.S. existing home sales in 2007 — to be released later this month — are expected to be down 12.7 percent from 6.48 million in 2006, the group said.

The trade group's forecast for 2008 was unchanged from last month. It also forecast 5.91 million home sales in 2009.

"The exact timing and the strength of a home sales recovery is a bit uncertain," Lawrence Yun, the group's chief economist, said in a statement. "A meaningful recovery in existing-home sales could occur as early as this spring, or it may be further delayed toward late 2008."

Numerous economists, however, are much more pessimistic about the housing market this year and are predicting far lower home sales.

Joshua Shapiro, chief U.S. economist at economic consulting firm MFR Inc., said home sales will likely be flat over the next few months and when sales and prices do move, the direction likely will be down. "We don't think we're at the bottom yet," he said.

Home sales will likely sink to an annual rate of below 5 million through 2008t, compared with the Realtors prediction of an annual rate of more than 5.8 million in the third and fourth quarters, Shapiro said, noting that the real estate trade group "is paid to be optimistic."

Optimists, maybe; soothsayers, definitely not. A year ago, the Realtors group was predicting more than 6.4 million existing home sales — about 760,000 more than actually happened.

The group is predicting the median price for existing homes in the U.S. will have dropped 1.9 percent in 2007 to $217,600 — the first annual drop since the trade group began tracking the data in 1968.

That number is projected to remain flat in 2008 before rising to $224,400 in 2009. The median is the point at which half sell for more money and half sell for less.

The Realtors group predicted new home sales would fall 13.4 percent this year to 669,000, down from a projected total of 773,000 in 2007. It forecast new home sales would rebound to 730,000 in 2009 and projected new home prices would be flat this year at $242,200, before rising to $256,500 in 2009.

Los Angeles-based homebuilder KB Home said Tuesday its fiscal fourth-quarter loss swelled as ongoing housing market woes led to fewer home sales and lower revenue, prompting the Los Angeles-based company to book charges to write down unsold inventory and for a tax allowance.

For the quarter ended Nov. 30, the company posted a loss of $772.7 million, or $9.99 per share, compared with a loss of $49.6 million, or 64 cents per share, in the year-ago period. Chief Executive Jeffrey Mezger warned that 2008 "will be another tough year for the homebuilding industry."