Pending Sales of U.S. Homes Plunged 12%

Quote: The prospect that foreclosures will continue to drive down property values may keep buyers on the sidelines awaiting further price declines. Unemployment at 9 percent and stricter credit requirements are further signs that a housing recovery may take years to unfold. Michelle Meyer, a senior economist at Bank of America Merrill Lynch in New York. “It pushes the housing recovery even further out into the future.” consumer spending rose less than forecast in April and consumer sentiment climbed this month. Consumer purchases rose 0.4 percent in April after a revised 0.5 percent gain the prior month that was smaller than previously estimated, Commerce Department figures showed. The increase compared with the 0.5 percent median estimate of economists surveyed by Bloomberg News. Incomes climbed 0.4 percent, matching the median forecast. Sentiment Improving The Thomson Reuters/University of Michigan final May index of consumer sentiment increased to 74.3 in May from 69.8 a month earlier, the group reported. The median forecast of 64 economists surveyed by Bloomberg projected a reading of 72.4, the same as the preliminary figure issued earlier this month. The index averaged 89 in the five years leading up to the recession that began in December 2007. New YorkTreasury securities were little changed. Sales were projected to fall after an originally reported gain of 5.1 percent in March, according to the median of 39 forecasts in the Bloomberg survey. Estimates ranged from a decline of 3 percent to a gain of 5.5 percent. From a year earlier, pending home sales fell 27 percent. Broad-Based Drop Three of four regions saw decreases from the prior month, today’s report showed, led by a 17 percent drop in the South. The Midwest decreased 10 percent, indicating bad weather may have played a role in those regions. Last month was the 10th wettest April since record-keeping began in 1895,...
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