Over the last week, the housing environment has weakened here in the US. Last week’s June housing report was not pretty: there was a surprise 8.1% drop, and building permits fell to 4.2%. (Both May readings were revised lower as well). This morning we received another report that pending home sales fell 1.1% while the market expected a gain of 0.5%. We have reiterated in past commentaries that housing would not do well because of demographics, hence housing prices will continue to stall even with historically low rates. Traditionally, housing is one of the biggest industries to lead us in and out of recession. The last few years has seen a rebound in prices and sales from its dismal bottom, but the current data suggests that housing will not help us further in our hunt for sustainable economic growth.