The National Association of Realtors announced Tuesday Pending Home Sales, a forward-looking gauge of the housing market, dropped 6.5% in August to its lowest level since the index was created in 2001. Economists were looking for only a 2.1% decrease, and compared to a year ago, pending home sales are down 21.5%. "This is still absolutely awful, confirming that the existing-homes market is now in freefall," said Ian Shepherdson, chief U.S. economist for High Frequency Economics. The NAR pointed to the credit crunch as the main instigator for the disappointing performance. NAR senior economist Lawrence Yun said, "Fewer contracts were being written because of mortgage availability issues, and a separate internal survey of our members shows more than 10% of sales contracts fell through at the last moment in August, primarily the result of canceled loan commitments." Despite some recent strength in the housing sector, this number shows that it has a long way to recovery.
Sources: WSJ, MarketWatch
Commentary: Blame It On The Credit Markets • Housing to Hold Fed's Attention for Years, Pimco's Gross Says
Seeking Alpha's news briefs are combined into a pre-market summary called Wall Street Breakfast. Get Wall Street Breakfast by email -- it's free and takes only seconds to sign up.