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Pending U.s. Home Resales Drop More Than Forecast

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July 8 (Bloomberg) -- Contracts to buy previously owned U.S. homes declined more than forecast in May, a sign prices that have been sliding for more than two years have yet to touch bottom.

The index of pending home resales fell 4.7 percent following a revised 7.1 percent gain in April that was greater than previously reported, the National Association of Realtors said today in Washington.

The prospect of further price declines may be discouraging offers, while rising mortgage rates and tougher lending standards make it harder to qualify for loans. Record delinquencies on home loans have led to concerns that Fannie Mae and Freddie Mac, the two biggest U.S. mortgage finance companies, may need to increase their capital by $75 billion.

``Homes are much more affordable, but they'll probably be even more affordable in six months' to 12 months' time, so it makes people reluctant to jump in,'' Nigel Gault, chief U.S. economist at Global Insight Inc. in Lexington, Massachusetts, said in an interview with Bloomberg Television. ``The message is that last month's big rise was not the signal that the market is starting to turn around. We've had a big correction this month.''

Economists had projected the pending sales index would fall 3 percent, according to the median forecast in a Bloomberg News survey of 38 economists. Estimates ranged from a drop of 6 percent to a 0.2 percent gain.

Pending resales were down 14 percent from May 2007, today's report showed.

There's more data at the link.

I see the economists graphs where wrong again....

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  • 396 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?

      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%

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