Hopes that the US housing recession may be nearing an end were dashed today after new data showed that American property sales fell to their lowest level on record.

According to the National Association of Realtors, pending sales of existing homes in February plunged while it is predicted the market will stagnate for another few months before recovering in the second half of the year.

The index of pending sales fell to 84.6 from January’s reading of 86.2. The index stood at 107.6 in February 2007.

Lawrence Yun, the Realtors’ chief economist, said the decline in pending home sales “implies we’re not out of the woods yet, though an era of successive deep sales declines appears to be over.”

The data emerged as Washington Mutual announced a $3.5 billion write-down on its mortgage book for the first quarter as America’s largest building society agreed a $7 billion cash injection from a consortium led by TPG, the US buyout firm.

WaMu’s writedown left the group with an overall loss of $1.1 billion for the first quarter and followed a $1.87 billion deficit in the previous three months, as the housing crisis continued to hit its bottom line.

WaMu said it had agreed to sell $2 billion of newly-issued common and preference shares to TPG, formerly known as Texas Pacific, and a further $5 billion of new stock to institutional investors in the group, to shore up its balance sheet following the recent losses.

David Bonderman, TPG’s founding partner, will join WaMu’s board as part of the deal.

Furthermore, Larry Kellner, a former chief financial officer at American Savings Bank and now chairman and chief executive of Continental Airlines, will also join as a so-called board observer for TPG. Major investors have the right to appoint a board observer, who can attend and participate in meetings of the board of directors, but are not part of the board and cannot vote.

WaMu said it will save $490 million a year by reducing its quarterly dividend from its most recent rate of $0.15 per common share, to $0.01. It will cut further costs by eliminating 3,000 jobs and by closing its 186 standalone mortgage outlets, opting to push homeloans harder through its 2,500 retail banking branches instead.

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