Contracts to buy previously-owned U.S. homes fell in June at double the pace expected by economists, adding to months of data showing a weak housing market.
The National Association of Realtors, or NAR, reported Monday that its Pending Home Sales Index, which is based solely on contracts signed last month, fell 1.1 percent to 102.7.
Economists’ expectations were way off, as most forecast a 0.5 percent gain. The latest weak housing market news follows three straight months of increases that fell below expectations. U.S. housing starts and building permits also unexpectedly fell for the month of June, suggesting the housing market is having a difficult time standing on its own without artificial measures taken by the government, many of which triggered the housing crisis in 2007 to begin with.
Pending home sales, which lead sales by a month or two, increased 6.0 percent in May. Contracts fell in the Northeast and the South, but rose in the West and the Midwest.
The housing market is obviously still hanging by a thread, relying upon artificial and dangerous government regulations and rules to regain a small measure of momentum. Earlier in June, two policy statements made by Mel Watt, director of the Federal Housing Finance Agency (FHFA), and Shaun Donovan, secretary of HUD, backed-off tight restrictions that required sound lending practices, repeating the mistakes of the subprime mortgage crisis.
The FHFA is the regulator of Fannie Mae and Freddie Mac, which along with the Federal Housing Administration (FHA) are responsible for guaranteeing about 75 percent of all mortgage credit in the United States. In an effort to boost a failing housing market, they’ve abandoned the rules against underwriting risky mortgages.