Pending home sales drop 3.2% in July
* Pending sales dropped 3.2% in July. That was more than twice as bad as the 1.5% decline that economists were looking for, though June's reading was revised up to +5.8% from +5.3%.
* The pending home sales index, at 86.5, is down 6.8% from its year-earlier reading of 92.8. The cycle low was 83 in March.
* Geographically, pendings fell 7.5% in the Northeast and 10.6% in the West. Sales were unchanged in the South and up 2.8% in the Midwest.
The latest National Association of Realtors figures show that pending home sales remain weak, though the pace of deterioration from year-ago levels has eased. That seems to be the message from a number of indicators, including the S&P/Case-Shiller monthly data on home prices.
What about the outlook? I believe we will continue to see a weak market through 2009, though it will be more of a "slow bleed" downturn than a fresh, sharp collapse. Key catalysts: Rising unemployment, still-high levels of existing home inventory, and ongoing uncertainty in the credit markets (though it's an open question as to whether that turmoil eases in the wake of the massive government bailout of Fannie Mae and Freddie Mac).