Tuesday, the National Association of Realtors released the pending home sales for June and showed a drop of 2.6%; this was the lowest on record that dates back to 2001. Since its peak in April of 2005, the index is down by over 40%.
The information includes the number of buyers who signed contracts to purchase homes. The National Association of Realtors cited the weak economy and strict lending standards are the main reasons for the continuing drop in the housing market.
High unemployment and the weak job market can also be credited for the drop. New home sales increased slightly in the spring while the $8,000 tax credit was being given by the government, once the tax credits expired on April 30 sales have been down.
Economists have also said that many buyers rushed their sales through for the tax credit who may have signed contracts during the months of May and June, and that may have added to the decline.
"There's too much supply for the demand that's there," said Michael Feder, chief executive of Radar Logic Inc. "That's not a dynamic in which values go up."
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Source: The Associated Press
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