No turnaround in sight for US housing

Pending home sales fell 3.5% in May, the lowest level since September 2001 and are 13.3% lower compared to a year earlier. The figures prompted Ian Shepardson, chief U.S. economist for High Frequency Economics to state:

"This is horrendous ... these numbers give the lie to the idea that any sort of recovery, or even stabilization, is underway in the housing market. In fact, it continues to deteriorate, rapidly."

The pending-homes-sales index is considered a reliable leading indicator of existing-home sales, which fell to 5.99 million annualized in May, down 10.3% compared with a year earlier while inventories of unsold homes rose to a 15-year high in May. It will be interesting to see the report on existing-home sales for June due to be released on July 25.


U.S. factory orders fall 0.5% in May
In other news US factory orders fell 0.5% in May following three months of straight gains. Economists had been expecting a 1.2% fall for May.

Despite the decline, economists said the factory sector has improved in 2Q07 with factory orders up 17.5% over the past three months at an annual rate.