NAR: Pending Home Sales Hold Steady

By
Real Estate Broker/Owner

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.

 

Comments (5)

Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Hi Mark

The NAR report shows that the market is headed in the right direction let's hope it holds.

Good luck and success.

Lou Ludwig

Jul 02, 2009 07:46 AM
Brian & Marie Spray
www.DFWAreaRealtors.com - Action Realty Group - Frisco, TX
Frisco TX Realtors

If its headed in the right direction, its turning slower than the Titanic heading for the iceberg.  Hopefully it does actually start improving in ways that we can measure consistently but right now I don't think we're there yet.  Too much uncertainty with the govt/economy is keeping everyone uneasy.

Jul 02, 2009 07:54 AM
Linda Ferrara
Coldwell Banker Enchantment Realty - Silver City, NM

Mark, thanks for this post. I just printed it out and plan to use it tomorrow when I present a market analysis to a seller who is being unreasonable with her price. Thanks for the ammo!

Jul 02, 2009 07:55 AM
Linda Ferrara
Coldwell Banker Enchantment Realty - Silver City, NM

Mark, I used your blog as re-enforcement when presenting my Market Analysis. I actually think the Seller got it! Thanks much!

 

 

 

Jul 03, 2009 04:35 AM
Mark MacKenzie
Phoenix, AZ

Linda:  I am flattered, glad I could help. :)

Jul 03, 2009 04:38 AM