Some housing bubble news from Wall Street. "Overseas buying of new Freddie Mac notes on Tuesday was sub-par compared with a string of deals drawing near-record purchases. Freddie Mac and Fannie Mae have consistently sold at least half of their new note issues this year outside of North America. The securities draw buyers seeking high-grade U.S. debt with higher yields than Treasuries."

"The distribution of new Freddie notes placed overseas on Tuesday dipped to 45 percent. 'There could be a few reasons: the Japanese year end is coming up..maybe the Chinese are looking at other products like mortgage-backed securities, which have cheapened up recently,' said K.N. Sundararajan."

"'In our view, the system 'works' as long as overseas sales average 35 percent or greater over time,' said Jim Vogel. 'Consistently lower than that would require wider spreads to clear the domestic market for $5 billion issues.'"

"Fannie Mae on Wednesday said it would update investors on its business and an $11 billion restatement process next week, a day before a U.S. House panel holds a hearing on the company's accounting scandal."

And on the homebuilders. "Homebuilding stocks came under pressure Wednesday after one analyst cut his earnings forecast for the group for 2006 and 2007, citing order drops and other negative housing fundamentals that he says not even the spring selling season can save. Analyst Stephen East wrote, 'We distinctly are not in the camp that the sky is falling; but it is pretty overcast right now.'"

"'The hope of many in the industry that the spring selling season will save the day is just not in the cards,' he said."

"'We have discussed many times that we believe we are in that transition phase from hyper-growth to sustainable growth, and that the phase would be painful. Well, it is painful, and much like the teenage years, it is just a phase that all must endure. Unfortunately for those banking on a spring selling season rescue, the transition is in place and we do not see it reversing just because the weather warmed up and the flowers bloomed,' East wrote."

"East's concern is that builders' difficulties over the last three months show a changed level of housing demand that is not yet reflected in Street estimates. He also notes that interest rates could move up more than expected. East believes homebuilder stocks have a Fed funds rate of 5% priced in; however, he said he isn't sure if a 5.25% or 5.5% level is priced in."