The NAR announced yesterday that their pending home sales index held steady in May rising 0.1% to 90.7. It is the highest reading since September of 2008 when the index hit 90.9. That's the good news.
The bad news is that while there is the possibility that home sales have bottomed, at least for the time being, the current rate of demand is insufficient in absorbing the excess supply of homes. Until the excess supply of homes is absorbed, home values will erode. Currently there is a 9.6 month supply of housing, this is well above a balanced market.
When you consider that rates are still near historic lows, we have an $8,000 first time home buyer tax credit, and housing affordability is hovering near record highs, and yet despite all of this home sales remain sluggish, it raises concerns about how long it will be until the housing market does indeed reach a bottom.
A record 12.07% of all mortgages are 30 days late and yet demand for real estate is as anemic as it has been since 1997, it's not a winning combination.