It is hard to believe what passes for good news during this "Summer of Recovery".  The stock market rallied today partially on the National Association of Realtors' announcement that its Pending Home Sales Index rose during July.

While an increase is preferable to a decrease, especially if it results from undistorted demand, the figure must be put into proper perspective. 

• July's figure is the third lowest on record 

• It represents the third straight month where pending home sales were below the level which pre-dated implementation of the Stimulus Spending Bill and Obama's housing stimulus initiatives

• The data indicates that the housing market is presently in its worst condition since the bubble collapsed

• These record lows are occurring during the annual home buying season

• Demand this weak, especially in an environment defined by high numbers of distressed transactions, is consistent with falling prices

• Housing prices are likely to fall for the remainder of the year and into 2011 as seasonality restrains any rebound in demand