A Housing Relapse

The housing market seems to have fallen through the floor on Tuesday, with single-family home sales slipping to their lowest level in 15 years. Existing home sales fell to their lowest level since the National Association of Realtors began keeping those numbers in 1999, meaning nobody really knows when they were last this low.

In part, this is because of the distortions provided by the homebuying tax credit, which expired on April 30. Home sales were up when people could take advantage of the tax break, and have dropped ever since. Overall, they're projected to be right where they ought to be: The chief economist of the NAR projects that we'll see total home sales of around 5 million in 2010, slightly up from the average of 4.9 million annual sales over the past 20 years.

The larger question at this point is whether the ups and downs of the housing market will be enough to tip the economy back into recession. While that still seems unlikely, the economy won't be back at full strength until at least one of the twin scourges of unemployment and housing concerns reaches the recovery stage.