Existing home sales for May not only came in well below expectations, but below April levels. The significance here is that existing home sales are measured at closing, so a nice bump in sales was expected given the tax credit crowd that had signed contracts in March and April moving to the closing table in May and June. Looking at the May figures, that didn’t happen. Perhaps June makes up for that, but it will be another month before we know for sure.

In the meantime, we get May new home sales tomorrow. New home sales are measured at the time the contract is signed, so a May contract signing being after the expiration of the tax credit deadline, sales figures for May are predicted to fall 15 percent from April.

And in the context of disappointing news on the housing front, I bring you the following quote.

“There’s no question that today’s housing market is in significantly better shape than anyone predicted 18 months ago,” said Shaun Donovan, President Barack Obama’s housing secretary.

To quote tennis legend John McEnroe, “You cannot be serious!”

Look at percentage of mortgages that are 90 or more days delinquent or in foreclosure. According to the Mortgage Bankers Association, in the fourth quarter of 2008 it was 6.3 percent. As of first quarter 2010, it was 9.54 percent. Over that 18-month period, home prices have continued to fall, particularly in the hardest hit housing markets. The backlog of foreclosed and yet-to-be foreclosed properties has only grown. And there are more strategic defaults — where borrowers not in financial distress and capable of paying their loans but give up nonetheless — with each passing day.

Mr. Donovan, it isn’t even certain that the housing market has bottomed yet, much less being in “significantly better shape than anyone predicted 18 months ago.”

The economy is certainly better than 18 months ago, but the housing market? Not a chance.

Follow Greg McBride on Twitter.

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