bubbleinfo.com

Wow. What an eye opener. And this is May they're talking about, the month with the "big" increase in sales. If Jim's numbers for June don't improve, this report is going to look REAL depressing come next month...

I was particularly struck by this line: Despite the continued price declines, affordability remains stretched and buyers are waiting on the sidelines for even lower prices.

To me that really hit the nail on the head. In 2005/6, nobody cared that they couldn't afford the house they were buying -- it was just for a short term. Now, the buyer's psychology has snapped around -- no doubt helped along by endless news reports of people getting foreclosed upon -- and people aren't buying unless they can actually afford it (wow, what a concept). Again, that spells trouble for the middle and upper market where people are trying to sell at unaffordable prices.

Interest rates going up almost a point isn't helping the affordability issue either.