US Housing Market Takes Turn For The Worse

NEW YORK (MainStreet) -- Just when you thought the U.S. housing market was getting up off the canvass, along comes a one-two punch that threatens to put homeowners down for the count.
First comes new data from the National Association of Realtors which shows pending home sales falling 5.5% in April.
The decline includes a downward revision to March numbers, leaving the pendig home sales index measure at 95.5, still 12 points better than the April 2011 pending home sales activity.
Pending home sales reflect home sales that generate contracts, but doesn’t include home sales closings.

The NAR tried to put a positive spin on the numbers.
“Home contract activity has been above year-ago levels now for 12 consecutive months. The housing recovery momentum continues,” said NAR chief economist Lawrence Yun in a statement.

“The housing market activity has clearly broken out at notably higher levels and is on track to see the best performance since 2007,” Yun added.  “All of the major housing market indicators are expected to trend gradually up, but a new federal budget must be passed before the end of the year for the economy to continue to move forward.”

The NAR estimates that total 2012 U.S. home sales should hit 4.66 million, compared to 4.26 million in 2011. Its “upper limit” for 2013 is 5.3 million, but only if lending returns to normal, stable levels -- no sure thing in this uncertain economy.

Another disturbing number for the housing market comes from the most recent Case-Shiller Home Prices Index. Case-Shiller data shows that the average U.S. home value fell by 2% in the first quarter of 2012. Urban areas were hit hard, with the index’s 10 City Composite down by 2.8%, and the 20 City Composite down by 2.6%.

Case-Shiller provides an overall picture of a housing market that in many cities continues to touch the lowest levels since 2006. Major metropolitan areas like Atlanta, Chicago, Las Vegas, and Chicago all saw home values fall for the quarter, hitting “new lows” according to the index.