It was the lowest sales pace since April and followed months of steadier sales boosted by the tax break that was set to expire on Nov. 30.

Buyers would have had to sign a contract on a new home by early October at the latest in order to receive the original tax credit, which was ultimately extended until June and expanded to include repeat buyers.

New home sales are recorded when a contract is signed, not at closing, as existing-home sales are. On Tuesday, the National Association of Realtors reported that resales popped 7.4% in November as buyers rushed to complete sales ahead of the deadline.

“The housing recovery is far from becoming self-sustaining,” wrote Anna Piretti, an economist for BNP Paribas. “The current rebound remains very much dependent on government support.”

November’s sales were far weaker than the 421,000 expected by economists surveyed by MarketWatch. See our complete economic calendar and consensus forecast.

October’s sales pace was revised lower to 400,000 from the 430,000 earlier reported.

Sales were down 9% compared with last November. Through the first 11 months of 2009, 349,000 homes had been sold, down 24% from the same period a year ago.

Government statisticians have low confidence in the monthly report, which is subject to large revisions and large sampling and other statistical errors. In most months, the government isn’t sure whether sales rose or fell. The standard error in November, for instance, was plus or minus 11%. Read the full government report.

The government says it can take up to five months to establish a new trend in sales. Over the past five months, sales have been on a 395,000 seasonally adjusted annual pace, down slightly from 404,000 in the five months ending in October.

Home builders continued to slash their inventories of unsold homes. The number of unsold homes dropped 2.1% to 235,000, the lowest in 38 years. The number of homes for sale that are under construction or not yet started fell to a record low.

Builders have cut back on production of new homes, but still face stiff competition from unsold existing homes as foreclosures continue to mount up.

At the November sales pace, it would take 7.9 months to sell the inventory, up from 7.2 months in October.

Once a home is completed, it’s taking 13.6 months to sell it, a reflection of the mismatch between the more expensive homes in the inventory and the lower priced homes that have been selling.

Very expensive homes did sell better in November, however, with the market share of homes costing more than $750,000 rising to 5% from 2% in October. Forty-five percent of sales were for less than $200,000 and 76% were for less than $300,000.

The median sales price of a new home sold in November was $217,400, down 1.9% in the past year.

Sales fell in three of four regions, led by a 21% drop in the South to a 19-year low. Sales fell 9% in the West and 3% in the Northwest. Sales increased 21% in the Midwest.

In a separate report, the Commerce Department said income from wages and salaries rose a seasonally adjusted 0.3% in November, pushing total income growth to 0.4%. Real spending increased 0.2% in November. See full story on the income and spending data.

Also, consumer sentiment improved slightly in December, but consumers are still anxious about their own finances, according to the University of Michigan/Reuters survey released Wednesday. See Economic Report on consumer sentiment.

Rex Nutting is Washington bureau chief of MarketWatch.

Single-family projects dropped 3 percent, the first decrease since January, while work began on 25 percent more multifamily units such as apartments, figures from the Commerce Department showed today in Washington. Totalhousing starts rose 1.5 percent to an annual rate of 598,000, the highest level in nine months and matching economists’ expectations.

Builders may be reluctant to further increase the supply of homes amid uncertainty over whether the Obama administration’s $8,000 tax credit for first-time buyers will be extended beyond November, economists said. The incentive, plus foreclosure-driven declines in prices, has helped stabilize the housing market in recent months following the biggest slump since the Great Depression.

“We may be in for a period of consolidation, given the apparent end of the tax credit” said Stephen Stanley, chief economist at RBS Securities Inc. in Stamford, Connecticut. “We’re certainly going to see, over time, housing starts rise.”

A separate report today from the Labor Department showed the number of Americans filing first-time claims for jobless benefits fell unexpectedly last week, a sign the labor market is deteriorating at a slower pace as the economy pulls out of the recession.

Continuing Claims

Applications dropped by 12,000 to 545,000 in the week ended Sept. 12, from a revised 557,000 the week before. The total number of people collecting unemployment insurance rose the prior week.

Stocks fluctuated, a day after the Standard & Poor’s 500 Index climbed to an 11-month high, as disappointing sales at Oracle Corp. and FedEx Corp. offset the decrease in jobless claims. The S&P 500 was up 0.5 percent to 1,073.83 as of 10 a.m. in New York.

Starts were projected to rise to a 598,000 annual pace from a 581,000 rate initially reported for July, according to the median forecast of 74 economistssurveyed by Bloomberg News. Estimates ranged from 570,000 to 640,000.

Permits, a sign of future construction, climbed 2.7 percent to a 579,000 annual rate in August, also led by an increase in multifamily. They were projected to rise to 583,000, economists forecast.

Construction of single-family houses, which account for about 85 percent of the industry, fell to a 479,000 rate, the first decline since January. Work on multi-family units, which makes up the rest of the market and is often volatile, jumped to a 119,000 rate.

Gains in Northeast

The increase in starts was led by a 24 percent increase in the Northeast. They rose 0.9 percent in the Midwest, and fell 2.4 percent in the South. The West was little changed.

Volatility in multifamily projects has obscured the underlying improvement in residential building. Construction of apartments and condominiums surged 56 percent in May only to slump by 21 percent and 15 percent the next two months.

Americans are taking advantage of the Obama administration’s $8,000 tax credits for first-time buyers that expires at the end of November. Those with jobs, cash to make down payments and good credit scores are picking up bargains as record foreclosures have driven down home prices by about 32 percent from their peaks in mid-2006, according to the S&P/Case- Shiller index.

Home Sales Rise

Combined sales of new and existing homes rose in the four months though July.

A report yesterday showed gains in sales and buyer traffic pushed builder confidence this month to its highest level since May 2008.

Luxury builder Toll Brothers Inc. is among companies that see demand improving, even as losses mount.

“In the last six months, we see a pretty significant change in some markets,” Chief Executive Officer Robert Toll said in an interview Aug. 27 with Bloomberg Television. “People are now concerned with missing the market.”

The expiration of the tax credit for first time buyers may result in a downdraft for sales and construction, Mark Vitner, a senior economist at Wells Fargo Securities LLC in Charlotte, North Carolina, said before the report. The housing market is unlikely to recover fully until the unemployment rate stops rising and the economy begins creating jobs, he said before the report.

Who Must Get a Bond

There are many businesses that must operate under a bond. It would be impossible to list them all here, and they vary from state to state, but here is a short list of some of the people and businesses you probably work with every day who are not permitted to work without some kind of license or permit bond.

• Liquor stores
• Cosmetologists
• Insurance agents
• Real estate salespeople and brokers
• Car dealers and salespeople
• Electricians and plumbers
• Private detectives
• Gasoline stations (tax bonds)

How Bonds Protect Consumers

In order to get a bond, a business must pass an investigation on many levels. For instance, if the surety company (the business that provides the bond to the business for a fee) is not confident of the applicant’s financial standing or professional qualifications, the surety will deny the bond. This is the first step in protecting the consumer.

The second step is making sure the applicant sticks to the promise to do business in the prescribed manner. This is done through the threat of revoking the bond for noncompliance, or if complaints are not dealt with. If the surety cancels the businesses bond, the license is no longer valid.

If the complaints or problems regarding the bonded business go unresolved, the surety eventually pays for whatever is necessary to make it right. In this regard, the surety is almost acting as an insurance company paying a claim. This is necessary because many of the issues covered in the surety bond are not covered by ordinary business insurance—most businesses are not allowed to insure their own companies against violations of codes or laws, so the surety picks up where business insurance leaves off. Here are some of the bonds and examples of how they would help.

Electrician Bond. An electrician who is hired to repair electrical wiring violates the code restrictions. To keep his bond, he must fix the problem at no cost to the homeowner.

Contractor. A concrete contractor is hired to build a driveway for a small business. The work was scheduled to be completed in two months. The contractor started it, but a year later had not finished it. The surety company paid for the project to be finished by another contractor.

Day Care License. Many states require a certain number of medical practitioners in a day care setting. A center that is found not to have enough nurses, for instance, must provide the additional nurse within a certain time frame or the business will lose its license.

Mortgage Broker Bond. A mortgage broker needs a bond to guarantee compliance with state mortgage regulations, and the bond covers restitutions should he or she not comply.

Licensing for Drug Manufacturers. This license is granted by the Food and Drug Administration mostly for individual drugs, and requires extensive tests in various stages to guarantee that the manufacturer has complied with all requirements in determining the safety of a new drug. A drug that does not pass is not marketed to consumers.

Even though some bonds and licenses don’t prevent all types of hazards and no bond can cover every possible event, you can see how the license and permit bond can offer much protection for the consumer. There are many of these bonds available, and cover everything from construction and personal appearance services to public officials’ actions and used car sales. The money behind the bond is what forces the business to take the regulations and laws more seriously, and the bond itself helps cover the costs of fixing any damage done.

Although it would be impossible for all of the available bonds to be listed here, an internet search will reveal some excellent sites for finding all different kinds of bonds. If you are looking for a specific kind of bond to apply for, check with your state offices before applying to make sure you are getting the correct ones, and will have enough coverage for your license.

If you are a consumer and are hiring work to be done, applying for a mortgage, or making a large purchase, consider checking to see if the person you are buying materials or services from needs a license to operate, and if he or she has a bond. For instance, if you hire a roofer who does not have a bond, you have no recourse for a job not done or done poorly and not to code. If you are a business, you can also require bonds from your employees. Look up information on fidelity bonds to see how they work.