The sluggish economy continued to take its toll on the housing market as pending home sales fell 7.7% in January, the National Association of Realtors reported today.

The association's pending home sales index was 80.4, compared with 87.1 in December. In January 2008 the index was 85.9. The January 2009 index was the lowest level since the association began the index in 2001.

"Even with many serious potential home buyers on the sidelines waiting for passage of the stimulus bill, job losses and weak consumer confidence were a natural drag on home sales," said NAR Chief Economist Lawrence Yun in a statement. "We expect similarly soft home sales in the near term, but buyers are expected to respond to much improved affordability conditions and from the $8,000 first-time buyer tax credit."