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.

Let’s hope all those subprime borrowers have good credit. Wait a sec…

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

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