The search for the bottom continues. For the third straight month, sales of existing homes in the United States rose, month-to-month, up 2.4 percent, on a seasonally adjusted annual basis. Perhaps more interesting: when compared to a year ago, sales only fell by 3.6 percent, which suggests some kind of stabilization, at least as far as the number of homes being sold. The numbers were not as good, however, as April's pending home sales data for April had hinted at, indicating that a significant number of home sales are still failing to close, for whatever reason.
There are two encouraging data points for those wondering when the housing carnage will ever end: Total housing inventory fell 3.5 percent, reported the National Association of Realtors. There are now 3.8 million homes available for sale "which represents a 9.6-month supply at the current sales pace, down from a 10.1-month supply in April." Also of note: so-called "distressed properties" sales -- such as those resulting from foreclosure proceedings -- only accounted for 33 percent of all sales as compared to 45 percent in April.
The fact that one out of every three sales of an existing home in the U.S. is distressed tells us that the housing market is still very, very sick. And the most important data point of all is price: Median prices declined 16 percent compared to a year ago -- in the West, median prices declined 30 percent. That tells us all we need to know. Until prices stabilize, we have no bottom.