Bloomberg has the story U.S. October Existing Home Sales Fall 3.1% to 4.98 Million Pace:

Home resales in the U.S. dropped in October and prices fell by the most on record, signaling a deepening housing recession going into 2009.

Purchases of existing homes declined 3.1 percent last month to an annual rate of 4.98 million units, less than forecast, the National Association of Realtors said today in Washington. The median price fell 11.3 percent to $183,300 from a year earlier, the largest year-over-year decrease since records started in 1968.

Mounting foreclosures are pushing down home prices and adding to the inventory of unsold houses. Sales may slump further as the worst credit crisis in seven decades makes banks reluctant to offer mortgages.

Someone on CNBC tried to spin this as a positive thing. The reasoning: If home prices are falling, maybe we’ll work through the inventory faster. However, the fact that the sales pace has declined indicates that prices may have a bit further to fall before we really make a significant dent in the inventory.