Housing Market Still Weak

Existing home sales in May fell 2.2%. Economists were expecting a surge in sales since there should have been a surge in contracts signed in March and April as the deadline for the tax credit was set to expire. Instead, actual sales fell.

I've insisted for some time that the residential market is beholden to the jobs market. Until we see the unemployment rate drop significantly, there just won't be enough new home buyers. All the tax credit did was extend the period of time it will take for this market to bottom out. It was meant to help bail out the mortgage brokers, real estate agents and homebuilders, all of whom were complicit in this mess.

Still, Washington keeps throwing money at Fannie Mae and Freddie Mac, and they have been left out of the financial regulation bill that is being considered in Congress. That culture of corruption is at the heart of the matter, yet since Congress has received so much in the way of political contributions from these industries over the years, it is no wonder they don't have the courage to deal with the issues. Same ole same ole.