The National Association of Realtors said its Pending Home Sales Index, based on contracts signed in December, dropped 3.5 percent to 96.6 in December, after hitting a 19-month high in November.

The Federal Reserve has suggested a number of ways other policymakers could step in to help the beaten-up market, including giving government-controlled mortgage finance firms Fannie Mae and Freddie Mac a bigger role in refinancing loans.

Another report showed house prices measured by the Federal Housing Finance Agency rose 1 percent in November from October.

"This is potentially negative for January existing home sales although the two do not always go hand in hand," said Jennifer Lee, a senior economist at BMO Capital Markets in Toronto. "So does this mean the story has changed and housing is back in the dumps? Nope."

A glut of unsold homes is weighing on house prices and frustrating the sector's recovery, even though mortgage rates are near record lows. Home resales have risen for three straight months.

Some officials at the Fed say the central bank should consider further purchase of mortgage-backed securities as a way to help spur a stronger recovery, but no action is expected at the end of the Fed's first policy meeting of 2012 later on Wednesday.

Lenders have adopted stringent requirements for potential homeowners, demanding down payments of as much as 20 percent, and contract cancellations have averaged about a third over the past few months.

But the reports on Wednesday did not change perceptions that a nascent recovery is under way in the housing market, which continues to be challenged by an oversupply of properties.

"I don't think that lower mortgage interest rates are going to help much right now," said Robert Dye, chief economist at Comerica in Dallas. "That's not where the bottleneck is, and that is in two places: credit availability and the processing of paper work."

Applications for home purchase loans declined 5.4 percent last week after two straight weeks of sturdy gains, the Mortgage Bankers Association said in a separate report.

Economists had expected signed contracts for sales, which lead existing home sales by a month or two, to fall by only 1.0 percent. However, sales were up 5.6 percent in the 12 months to December.

"We are encouraged by the pop in prices as it may be a signal of further stabilization in the housing market and evidence that the erosion in home prices may be nearing an end," said Millan Mulraine, senior macro strategist at TD Securities in New York.

(Reporting by Lucia Mutikani; Editing by Leslie Adler)

However, prices were down 1.8 percent in the 12 months to November, indicating the recovery in the housing market would be painfully slow.

WASHINGTON (Reuters) – Signed contracts for the sale of existing U.S. homes retreated from a 1-1/2-year high in December and demand for home loans fell last week, pointing to a moderation in home sales after recent hefty gains.

Annett said she boarded her bus and it left.

EDINBURG, Texas – Authorities suspect hunters may have shot two South Texas middle school students who were wounded by gunfire Monday afternoon while trying out for a basketball team.

Two boys — ages 13 and 14 — were shot, said Hidalgo County Sheriff Lupe Trevino. Classes were not in session at Harwell Middle School when the shooting happened around 4:45 p.m., but the school complex was immediately placed on lockdown. Edinburg school district spokesman Gilbert Tagle said a number of after-school activities were going on besides the basketball tryouts, including a concert and a faculty meeting. He estimated as many as 200 children could have been on campus.

"They told us to, `Get inside, get inside,'" she said.

Harwell Middle School opened just this year on the rural property northeast of Edinburg, which is about 50 miles northwest of Brownsville. Homes line the road approaching the school, but open fields stretch out behind it and to the north.

She said she heard no shots but saw a group of people on the outdoor court standing near one boy on the ground. A school nurse tended to him while another boy was sitting up.

Annette Vargas Ugalde, a 15-year-old eighth grader, said she was about to board her bus near the gym after school when school officials started rushing students indoors.

The outdoor court where the shooting took place was north of the school complex at an athletic facility that includes a football field, track and tennis courts, said Oziel Garcia, a 14-year-old eighth-grader.

Investigators have spoken with owners of surrounding farms and the land was being leased to deer hunters, Trevino said. Authorities interviewed some hunters who were found on adjoining properties.

Investigators believe the shots may have come from hunters on adjacent farm property, Trevino said. The shots did not come from the campus and were not a result of a drive-by, he said.

Classes will go on as scheduled Tuesday, but with increased security and counselors available to speak with students, said Tagle, the district spokesman.

At the time of the shooting, one of the boys was going for a layup. The other was waiting his turn to try out, Trevino said.

One of the wounded boys was in critical condition Monday night with a bullet embedded in an organ. The other was stable and awaiting X-rays, Trevino said.

Samuel Cepeda, a 15-year-old eighth-grader, said gangs have been a problem at the school, and he has worried about security. However, Trevino said investigators do not believe the shooting was gang related.

Made of acrylic and nylon, the scarf comes in black, charcoal, olive, taupe, eggplant, wine and light grey. But for $83, it's a lot of money.

I love this eternity scarf as a new twist on a classic look. Stars like Kourtney Kardashian, her sister Kim and Hilary Duff are all wrapped up in this Paula Bianco style at singer22.com.

You can wear this type of scarf more ways than one. Try around the neck or across the shoulders like a shrug.

On a hunt, I found something that I bought from Urban Outfitters, a store that I think has such a handle on knits, for $34. The Deena & Ozzy Ribbed Eternity Scarf is big and comfy and almost like wearing a sweater in itself. The acrylic scarf measures 80 inches in length and 20 inches in width. It comes in grey, lavender and rose.

By Sasha Charnin Morrison for UsMagazine.com. To read more of the Recessionista blog, click here.

I have found that a scarf is not only a neccessity but a celebrity favorite. In fact, scarves may be the MVP of every wardrobe. You can drape, wrap, add pins or even cover yourself, sari style.

As the temperatures begin behaving like a rollercoaster (humid, hot, cool, windy, balmy -- oy!), what are you supposed to wear?

My good friend was on a hunt for a budget-friendly, sexy and somewhat slutty cocktail dress. Hello? Norma Kamali!

Norma has a wonderful line selling out over at Wal-Mart-available online and from the store. It's a tube style below the knee, black, slightly ruched at the bust side's seams. Polyester and Spandex. Sized XS-XXL (thank you, Norma!).

This tube dress is timeless, elegant and chic. Bonus: it comes with a bra attachment. Pair it with a great statement necklace or bangles and a pretty sexy high heel sling back pump. For cooler nights, a blazer could work as could a sequined jacket. The sky's the limit. Wear with a contrasting color belt in a neon or a snakeskin for extra voltage!

PRODUCT DETAILS
Tube style
Slight ruching at the bust's side seams
Below the knee
Polyester, spandex. Machine wash
Color:     Black
Fabric Care Instructions:     Machine Wash
Fabric Content:     Polyester,Spandex
Model No.:    NK39606
Shipping Weight (in pounds):     0.4
Assembled in Country of Origin:    Imported
Origin of Components:    Imported
Wal-Mart No.:    007888898

Thakoon Panichgul hit London this week for a splashy soirée at Soho House Basement and a trunk show for Net-a-Porter’s VIP clients. But it wasn’t all work and no play. Panichgul found a little time to explore the city. (There he is, above, tryinig on the local accouterment in East London.) He sent back the following snaps from his travels.

“Tea (or rather many, many teas), at Claridge’s. Practically spent all of my days here for meetings. This is the view from our usual spot in the back.”

Photos: Thakoon Panichgul

“I went to East London to meet a friend for lunch and stroll. After an amazing vegetable tagine at Rochelle Canteen, we took a stroll through the neighborhood—cool wall art.”

“A Sherlock Holmes store! So touristy yet funny, I had to go in.”

“I went to say hi to the Dazed & Confused team at work. Was nice of Jefferson to pop in to say hi even though he just returned from Australia and was probably über-jet-lagged. This is the amazing margarine sculpture they have at the office.”

It’s a cross-country season for Maria Cornejo. Fresh off the tenth anniversary party for Ikram Goldman’s Ikram boutique in Chicago this weekend, the designer is in Los Angeles, where she’s doing some celebrating of her own. Tonight, she’ll host a dinner for Paula Hayes, whose glass terraria, ceramic birdhouses, and silicone planters she’s showcasing for the next six weeks in her Melrose Avenue boutique. Hayes’ art will be familiar to anyone who’s visited MoMA since last November. Her installation, Nocturne of the Limax Maximus, was on view in the museum’s lobby until mid-April, and the vivid green plants encased within their handblown glass sculptures provided a striking counterpoint to New York’s long, dreary winter. “Paula is an artist who works with organic shapes and forms in unexpected materials,” Cornejo told Style.com. (She’s also a longtime client; Hayes wears Cornejo’s designs almost exclusively.) “I love the way that her terraria are at once very futuristic-looking, yet still encompass the natural world.” (One of said terraria is above.) The best part of the arrangement? Says Cornejo: “Our ficus tree will get a new home in a silicone planter.”

No rest for the green-thumbed, though. Next week, Cornejo’s back in New York, where on Thursday, she’ll host yet another event—her first ever for her fledgling menswear collection. (She shows a few key men’s looks on the women’s runway.) At Project No. 8 Men’s on the Lower East Side, Cornejo will be on hand to style guys, selling the limited-edition tees she designed with husband Mark Borthwick to benefit Doctors Without Borders, and perhaps most tantalizing of all, offering the collaborative Common Projects x Maria Cornejo sneakers (below) that even her own stores don’t carry.

Maria Cornejo will be at Project No. 8 Men’s (38 Orchard St., NYC) from 6-8 p.m. on Thursday, May 19; to RSVP, email rsvp@projectno8.com.

—Nicole Phelps

Photo: Alexandra Wyman / WireImage

—Alexis Brunswick

Mugler creative director and Lady Gaga stylist Nicola Formichetti has had a big past couple of days. Last week, he set up shop downtown with his pop-up concept store, Nicola’s; yesterday, he hosted a presentation for nine emerging Chinese designers in an effort to celebrate international talent; this afternoon, Formichetti (who has worked with Uniqlo for over five years and currently stands as the brand’s fashion director) debuts his latest project for the Japanese retailer. He has created a new line, called Uniqlo Innovation Project, along with the company’s designer director, Naoki Takizawa, and creative director, Kashiwa Sato.

“We wanted to create something for the future,” Formichetti tells Style.com. “Something functional, stylish, and new.” The collection of parkas, hoodies, and track pants for men and women, made of cutting-edge materials like Uniqlo’s infamous Heattech, hits stores October 14.

What’s next from Nicola? “I’m actually thinking of bringing Nicola’s to other cities,” he says. “I loved meeting my virtual friends, but in a physical space this time.” Oh yes, and there’s the Mugler collection he’s hard at work on, which hits the runway in Paris September 29. Here, Style.com has the exclusive first look at Innovation Project.—Kristin Studeman

Photo: Billy Farrell / BFAnyc.com

—Nicole Phelps

Zara's heels can be worn well with grey slim jeans and a boyfriend blazer over an oversized T-shirt. I love this new "uniform," which seems to be the answer to everything. It's effortless and easy.

I love how this tough trend is making its way into our fashion vocab and wardrobes. I especially adore the unexpected items, like these grey pumps I stumbled on the other night before closing time at Zara and instantly fell in love.

For more information: Visit Zara.com

I needed some poking from my Facebook friends who shared the following words of wisdom on whether these need to be had or not. A "must," and "These shoes you posted are, like, amazing and a dream come true for me. I can only imagine what's in your closet -- can i just sit in your shoe closet?" were some of the replies. That's all I needed before I plopped down the plastic.