After teasing downtrodden homeowners with a surprising jump last month, the National Association of Realtors said Tuesday that May pending home sales fell 4.7 percent from April, and 14 percent from a year earlier. "This was a larger-than-expected setback," economists at Goldman Sachs said in a report. "But it was tempered by an upward revision to the surge in April, to 7.1 percent from the 6.3 percent originally reported."
Despite the sharp drop, Ian Shepherdson, chief U.S. economist for High Frequency Economics, says recent data points to the possibility of stabilization.
The overall picture of the index over the past few months is one of broad stability. It is still some 13% lower than a year ago but this is better than the peak 24% rate of decline at the turn of the year. But it is still much too early to call this the bottom of the market; there was a bigger, longer improvement in the winter of 2006/7 which eventually was followed by a renewed collapse. Housing is still desperately weak.
The big winners of the report?
Double-digit pending sales gains in May from a year ago were noted in Colorado Springs, Colo.; Sacramento, Calif.; and Spartanburg, S.C.