Another sign that the real estate market is in a slump that isn’t going to end soon:
WASHINGTON — Pending sales of existing homes dropped for the third straight month in May, a real estate trade group said Tuesday, demonstrating the persistence of the housing slump.
The 3.5 percent decline in May, compared with the previous month, follows a drop of 3.2 percent in April and a 4.5 percent dip in March. It leaves the National Association of Realtors’ index at its lowest point since September 2001.
The association’s index of pending home sales fell to 97.7 in May, from a downwardly revised figure of 101.2 in April. The May figure is 13.3 percent lower than the May 2006 reading of 112.7.
And there’s at least some evidence that the mortgage situation is at least partly responsible:
Lawrence Yun, NAR’s senior economist, said turmoil in the mortgage market is weighing on home sales, as lenders pull back from riskier mortgages to borrowers with weak credit histories.
“Some transactions are being postponed from mortgage market disruptions,” Yun said. While mortgage applications are increasing, some of that is a result of buyers seeking alternatives to subprime financing, he said.
It will be awhile before this works itself out.
