The National Association of Realtors said its index of pending home sales, which reflects homes under contract, sank to 97.7 in May from 101.2 in April. The latest reading is 13.3 percent lower than May 2006.Maybe the housing market will finally correct and become more affordable for the average middle class American. The current pain being felt in the industry may actually lead to better regulations and a healthier housing market.
Many middle class Americans can no longer afford a simple home. The rate of foreclosures is exploding with more pain expected as nearly $100 billion worth of subprime loans adjust to rates unaffordable to those that hold the loans. I remember the early 1990's saw a housing market in distress. In my own residential complex I saw prices drop from a high of $100,000 paid for a one bedroom apartment in the late 1980's to a similar unit selling for $25,000 just ten years later. I think this correction will last for years and is necessary if we are to maintain a middle class in this country.