Pending Sales Of Existing U.S. Homes Decreased 30% In May
Posted By thestatedtruth.com on July 1, 2010
Decline in sales of existing U.S. homes shows that the industry at the center of the financial crisis continues to  remain vulnerable in the absence of government support.  Sounds like everything needs government support to exist today!Â
By Shobhana Chandra             Â
July 1 (Bloomberg) — Manufacturing in the U.S. expanded in June at the slowest pace this year as factories received fewer orders and demand from abroad cooled. The Institute for Supply Management’s manufacturing gauge fell to 56.2 last month from 59.7 in May. Meanwhile, U.S. construction spending fell 0.2 percent in May and the index of pending home resales dropped 30 percent. Bloomberg’s Michael McKee and Margaret Brenna report. (Source: Bloomberg)
The index of pending home resales dropped 30 percent from the prior month, figures from the National Association of Realtors showed today in Washington. The drop was the biggest in records dating to 2001 and compared with a 14 percent decrease forecast in a Bloomberg News survey of economists.
The decline shows that the industry at the center of the financial crisis remains vulnerable in the absence of government support. A stabilization in housing will depend on gains in incomes and employment that may stem foreclosures and give Americans the confidence to start buying again.
“Demand will be pretty depressed in the next few months,†Scott Brown, chief economist at Raymond James & Associates Inc. in St. Petersburg, Florida, said before the report.
The Institute for Supply Management’s manufacturing gauge fell to 56.2 last month from 59.7 in May. A reading greater than 50 points to expansion, and the median forecast of economists surveyed by Bloomberg News was 59. Initial jobless claims increased by 13,000 to 472,000 in the week ended June 26, Labor Department figures showed.
Forecasts for the decline in pending home sales ranged from 4 percent to 25 percent, according to a Bloomberg News survey of 36 economists. Sales rose 6 percent in April.
All four regions saw decreases in May, today’s report showed, led by a 33 percent plunge in the South. Sales also fell 32 percent in both the Midwest and Northeast and 21 percent in the West.
Compared with May 2009, nationwide pending sales were down 16 percent.
Pending home resales are considered a leading indicator because they track contract signings. Closings typically occur a month or two later, and are tallied in the Realtors’ existing- home sales report.
Sales of existing homes, which account for about 90 percent of the housing market, fell 2.2 percent in May from the prior month, the Realtors’ group said last week. New-house purchases, which make up the rest of the market and are tabulated when a contract is signed, plunged 33 percent to the lowest level on record in May, according to the Commerce Department.
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