Pending home sales plummeted in July—dropping 12%—the steepest drop since the pending sales index was created and nearly 5 times what analysts were estimating.

``The housing market is bad and is going to stay bad for some time,'' said Zach Pandl, an economist at Lehman Brothers Holdings Inc. in New York, who predicted a 3 percent drop. ``This number does not look good for existing home sales for August.''

The median forecast was for a decrease of 2.2 percent, according to a survey of 26 analysts. Estimates ranged from a drop of 4 percent to an increase of 1.5 percent.
...
President George W. Bush on Aug. 31 said he will let the Federal Housing Administration, which insures mortgages for low- and middle-income borrowers, guarantee loans for delinquent borrowers. The new program will allow homeowners with a good credit rating who can't afford their current payments to refinance into FHA-insured home loans.

U.S. Economy: Pending Home Sales Plunge 12.2%, Most on Record [Bloomberg]
(Photo:stirwise)