I'm surprised that the National Association of Realtors (NAR) can get away with keeping that dot-org Web address, since every bit of information it puts out is aimed at funneling money into the pockets of America's struggling real estate clerks.

Take its latest monthy pending sales report. Altough numbers are down, once again, from the prior-year period, the NAR reports a month-to-month uptick as if it matters, and claims it's a good thing: "June Pending Home Sales Index Shows Market Improvement," the NAR says.

Tell us the truth, NAR, I say. Oh, and Fools, don't believe the chuckleheaded regurgitations you see from the likes of the Associated Press.

The report notes that the prior-month index had been revised downward, making even the meaningless month-to-month comparison easier. But the comparison that matters, year over year, shows an 8.6% drop from June 2006. This indicates that the weak housing market continues to get weaker -- and it's only an indication of contracts signed, not executed.

Will there be more failed sales on the heels of continued lender implosions, like the one that shaved a mere 90% off the value of American Home Mortgage (NYSE:AHM) yesterday? Investors in peers like Countrywide Financial (NYSE:CFC) and Accredited Home Lenders (NASDAQ:LEND) seem a bit squeamish today at the prospect.

Meanwhile, homebuilders like Pulte Homes (NYSE:PHM), Beazer Homes (NYSE:BZH), and Lennar (NYSE:LEN) continue to pour more inventory onto an already slacking market. That has meant, and will likely continue to mean, dropping prices. That, in turn, will further deter the flippers who powered the bubble, which will lead to more inventory, even lousier prices, less lending, and ... well, that's how cycles go. My Foolish colleague David Lee Smith described it in more detail here.

The moral of the story for investors of all stripes: Beware the cycle of enthusiasm and pain. The first one off the ride isn't too dizzy, but for those who remain, it can be a very sickening experience.

At the time of publication, Seth Jayson, a top-10 CAPS player, had no positions in any company mentioned here. See his latest blog commentary here. View his stock holdings and Fool profile here. Fool rules are here.