Ilyce Glink

If you're wondering what will happen to the housing market in the near future, the answer is: not much.

What has become painfully clear with the recently released existing-home sales data for July is that the government's real estate industry life support measures were truly keeping the housing industry afloat.

What we see now is that real estate should have flat-lined sometime last year. We can see the true effects of the home buyer tax credits, as well as the $1.25 trillion the Federal Reserve spent buying mortgage-backed securities. It's clear not only that the new home construction industry is in a depression, but that home buyer demand has all but evaporated, and may not return for quite some time.

Last week, the National Association of Realtors (NAR) announced that existing home sales had fallen 27 percent in July -- a drop nearly 50 percent greater than many economists had expected.

A day later, the National Association of Home Builders announced that new home sales had fallen more than 12 percent in July to an average annual sales rate of 271,000. This is a new low for new home sales. In 1982, when mortgage interest rates were at 18 percent, home builders still sold about 324,000 homes. In 2009, they barely sold 300,000 homes, and now we're about 10 percent below that number.

Oh, and 1982 was nearly 30 years ago.

But let's get back to this idea that economists are "surprised" by these poor housing numbers. Really? How could their expectations have been so far off? In mid-May, the Mortgage Bankers Association announced that interest in purchase mortgages (the kind you use when you purchase property, as opposed to when you refinance an existing mortgage) had, in their words, "plummeted."

In the weeks after the April 30 end of the tax credits, the Mortgage Bankers Association reported that interest in purchase mortgages continued to fall at 10 to 20 percent per week.

Even this week, refinancing makes up the vast majority of all mortgage activity. Meanwhile, mortgage interest rates are at 60-year lows. I just locked in a 15-year loan at 3.75 percent. After my mortgage interest deduction, my net interest rate might be something like 2 to 3 percent. It's virtually free money and fewer people are able to qualify for it.

What does this mean? Almost no one is buying homes. I fully expect that when the August existing home and new home sales numbers are released (typically in the third week of September), they will show further deterioration.

In addition to extremely poor sales numbers, the Realtors reported that the inventory of existing homes had risen to a 12 months' supply. That means it will take 12 months at the current rate of sale to sell all the homes that are currently on the market.

The inventory number, as scary as it is, doesn't include millions of foreclosures that the banks are withholding because they don't want to flood the market with listings. And, it doesn't include the millions of homes whose owners who either don't qualify or who are dropping out of the government's loan modification mess of a program. It also doesn't include the millions of home sellers who would jump into the real estate market in a heartbeat if they thought they had a chance of selling.

So, millions of homes aren't selling, and millions more have been foreclosed upon or are due to be that haven't yet come on the market. And millions of Americans have lost their jobs, many of whom are quickly aging out of eligibility for further unemployment benefits. And the moving average of new unemployment claims is rising to heights not seen since 2009. Is it any surprise that the housing market has faltered?

Perhaps economists who describe the recovery as "modest" or even "extremely modest" need to spend time away from their calculators and offices. Because if they were to look beyond the comfortable confines of Wall Street or Washington, D.C., they might see that, instead of a modest recovery, we have a deep recession or even a depression from which most of America hasn't yet recovered.