Existing homes sales report "was very disappointing"

USA Today's piece on March, 2007 sales of existing homes being down 8.4% from February was described by the chief economist for the National Association of Realtors, David Lereah, as being "very disappointing." Lereah revised his previous estimate that the housing market had bottomed out last September--he now thinks that the market won't recover until the third quarter of 2007.

But the paper also points out that others are "less optimistic," including Patrick Newport, chief U.S. economist for Global Insight, who thinks it will be the first half of 2008 before the housing market "recovers."

Of course, you have to put some thought into what "recovers" actually means. Not to mention the need to be very precise about what it is that is recovering. Are we talking about prices? Units? Both? Would you consider it a recovery if sales picked back up a bit, but the backlog of homes for sale remained high?

The ultimate reality is that the many measures of health in the housing market pretty much all look bad right now. And that's without taking into account the fiasco in the subprime mortgage industry where, by the way, the extent of the losses incurred by investors is still unknown. The company's that bought mortgage-backed securities simply don't have to write down the face value of the investment as long as they keep the investment on the books.

All pretty bad news for an economy that most economists recognize has been propped up for some time by rising housing values.