Pending Home Resales Drop to Record Lows

Vicious cycle of credit crunch and housing slump continues
By Wesley Oliver,  Newser Staff
Posted Sep 5, 2007 11:35 AM CDT
Pending Home Resales Drop to Record Lows
Open house signs fill a corner in Altadena, Calif. on Sunday, Aug. 26, 2007. Sales of existing homes dropped for a fifth straight month in July, falling to the slowest pace in nearly five years, while home prices fell for a record 12th consecutive month. The National Association of Realtors reported...   (Associated Press)

In yet another sign of the troubled housing market infecting the ailing credit market, the number of home resales plunged to a record low in July. The measure, which tracks the number of Americans signing contracts to buy previously owned homes, dropped 12.2% to 89.9, its lowest level since September 2001. Bloomberg had projected a 2.2% drop.

The market slump may curb consumer spending by depressing property values. One economist put it plainly: “The housing market is bad and is going to stay bad for some time.” Analysts say prospective homeowners face higher short-term mortgage rates and tougher loan standards. But a realty economist was more optimistic, arguing the market has been “stabilizing somewhat” since mid-August. (More home sales stories.)

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