Pending home sales fall 4.7% in May

We just got the May pending home sales data from the National Association of Realtors. Here's what the numbers looked like ...

* Pendings dropped 4.7% in May, compared with forecasts for a decline of 3%. April's reading was revised to +7.1% from the previously reported gain of 6.3%.

* Regionally, there wasn't much solace to be found as pending sales fell throughout the country. They were down 1.3% in the West, 2.9% in the Northeast, 6% in the Midwest, and 7.1% in the South.

* The index level was 84.7 in May, down 14% from the year-earlier reading of 98.5 but slightly above the cycle low of 83 set in March.

The housing market had a nice bounce in April. Too bad it doesn't appear to have carried through into May and June. We saw pending sales decline in all regions of the country in May, leaving the index only a few ticks off its recent low. Readings on mortgage application activity and home builder confidence also point to a disappointing wrap up to the spring selling season.

The reasons are straightforward: Consumer confidence is falling. Unemployment is rising. Higher energy and food prices are squeezing household budgets. And mortgage credit remains tight. Unless and until the economic clouds part, we'll likely see the housing market continue to struggle.