U.S. July pending home sales fell 3.2 percent

September 9, 2008 by · Leave a Comment
Filed under: Real Estate News 

No surprise here, as the market worsens and the credit situation gets much tighter we should expect this trend continue.  Fundamentally nothing has changed in the economy so we should not expect it to rise like the Phoenix as many dovish analysts have been predicting.  Lets review the U.S. problems that need to be addressed so we can understand the challenges.

1. Two Front War (expensive +$$$$$ = Inflation)

2. Credit Tightening (-$$$$$)

3. Bailouts (Adding Price Inflation)

4. Budget Deficit (More Inflation)

5. Rising Unemployment (Less Money for Consumption)

6. Higher Prices for Essentials [Food & Gas] (Less Money for Discretionary Spending -$$$$$$)

7. Exportation of Manufacturing Jobs (Reduce Discretionary Income through the lack of Higher Paying jobs which also effect local service based businesses which there Middle Class incomes use -$$$$$)

These are just some of the items that are going to make our recovery difficult and long.  Unless we see things fundamentally change in a way that addresses these issues, I think anyone who is calling for a bottom is either noise or the problem is getting worse because of the delay in address these critical problems in the U.S. economy that affects the world by its reduced consumption.

Release:

Pending sales of existing U.S. homes fell more sharply than expected in July, partially erasing gains from the previous month, data from a real estate trade group showed on Tuesday.

The National Association of Realtors Pending Home Sales Index, based on contracts signed in July, was down 3.2 percent to 86.5 from an upwardly revised index of 89.4 in June.

Economists polled by Reuters ahead of the report were expecting pending home sales to decline by 1.0 percent.

The association’s chief economist, Lawrence Yun, said the index was oscillating monthly but was essentially flat for many months now.

Source: Reuters

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