Pending home sales rose 0.7%, lower mortgage rates on the horizon

Further housing weakness will be triggered by a credit crunch was predicted by UCLA Anderson Forecast in a recent Investment Business Daily article.

UCLA Anderson Forecast predicted growth to rise and a fed funds rate to 4.5% from 5.25% and they see at least two, if not three, Fed rate cuts keeping economic growth this year in positive territory. Lower mortgage rates  are on the horizon.

With a 8 1/2 month backlog of housing inventory, a drop in mortgage interest rates would rev up a few engines.  The National Association of Realtors said that pending home sales rose 0.7%, a gain that came despite bad weather and the impact from subprime mortgage problems.