There has not been a single positive piece of housing news in more than a month. That string continued today as the National Association of Realtors put out is June figures for pending home sales.
The Pending Home Sales Index declined 2.6% to 75.7 based on contracts signed in June from an upwardly revised level of 77.7 in May, and is 18.6% below June 2009 when it was 93.0. The number is particularly stunning since in June of last year the economy was still in the midst of a recession.
The association reported that “the PHSI in the Northeast dropped 12.2% from May to 58.8 in June and is 25.4% lower than June 2009. In the Midwest the index fell 9.5% from May to 64.1 and is 27.8 percent lower than a year ago. The two regions where much harder hit than the South and West, which may be due to the fact that prices in those regions have already fall so much.
Housing continues to crumble even though Freddie Mac says interest rates are at all-time lows. Home prices have clearly not come low enough to end the “buyer’s strike” in the housing market. The NAR figures are a sign that home values could drop considerably more before prices and sales begin to rise.
None of the federal government programs, particularly HAMP, have been able to arrest the slide. High unemployment apparently is too great a hurdle for any intervention to overcome it.
Douglas A. McIntyre
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