Housing Crunch: Pending Home Sales Drop
Apr 8th, 2008 | By Contrarian Profits | Category: Featured, Financial News, Real Estate InvestmentsExisting US home sales dropped in February, according a National Association of Realtors (NAR).
The NAR pending home pending home sales index, a leading indicator of existing home sales, dropped 1.9% in February. The index is down 21.4% from the February 2007 level.
There has been plenty of shrill calls for government to intervene in the housing crisis, but what can – or should – government do?
“All through the boom, the bulls were claiming that the super-sized house price growth was based on fundamentals, and had nothing to do with slack lending practices,” says John Stepek in MoneyWeek.
“If they’re right, then prices shouldn’t fall very far before the fundamentals pick them back up again. If they were wrong, then house price gains were a bubble based on rampant speculation. Those bubbles need to be allowed to pop, so that people don’t keep throwing good money after bad.
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