Pending Sales of Existing U.S. Homes Plummets 30%

Buy, consume, spend. Recovery is right around the corner. (Image via Wikipedia)

Remember, 1 in 3 U.S. home sales in the first quarter was a foreclosure property, and foreclosures accounted for 31 percent of all residential sales in the first quarter of 2010.

From Bloomberg:

The number of contracts to purchase previously owned houses plunged in May by more than twice as much as forecast after a homebuyer tax credit expired.

The index of pending home resales dropped 30 percent from the prior month, figures from the National Association of Realtors showed today in Washington. The drop was the biggest in records dating to 2001 and compared with a 14 percent decrease forecast in a Bloomberg News survey of economists.

The decline shows that the industry at the center of the financial crisis remains vulnerable in the absence of government support. A stabilization in housing will depend on gains in incomes and employment that may stem foreclosures and give Americans the confidence to start buying again.