Some housing bubble news from Wall Street and Washington. "The slowdown in the housing market is being driven by growing inventories of homes from overbuilding and by speculators leaving the market, Toll Brothers CEO Robert Toll said Thursday. 'The housing market is experiencing an oversupply, to put it mildly,' Toll said during the luxury-home builder's annual analyst conference."

"'The supply is coming from speculators who bought in 2004 and 2005 who are now sellers, and to make matters worse aren't buyers anymore,' he added, noting that many homes built by more aggressive builders also are sitting unsold now."

"Toll management said that the company plans to continue to grow the number of its selling communities and buy back more shares. 'We've been using excess cash flow to repurchase stock, and will continue to opportunistically buy back more,' said Joel Rassman, chief financial officer. So far this quarter, Toll Brothers has repurchased about 1.65 million shares through Wednesday."

Peter Coy writes this at Business Week. "It's getting harder and harder for real estate agents to put a happy face on the market. And now it's suddenly looking like the Federal Reserve will raise interest rates again."

"Bernanke's gladiator-like aggressiveness on inflation is producing scowls at the National Association of Realtors, which worries that higher mortgage rates will make the housing market even softer. The group put out a public statement on the issue this week."

"Mortgage bankers also see the market slowing, but they aren't echoing Realtors in asking for a pause in rates. 'We've never publicly given the Fed instruction on how to conduct monetary policy,' Douglas Duncan, chief economist of the Mortgage Bankers Assn. said."

"Most economists don't think Bernanke is actually trying to reinforce a bear market in housing, but they do say that the market has turned decidedly bearish. (Economist) Richard DeKaser, calculates that over the six months through April, median sales prices have fallen at a 4.4% annual rate for new homes and at a 5.6% annual rate for existing homes."

"'If employment falls, that could precipitate price declines and all the speculation that's supported the market would be expunged,' says DeKaser. 'You could see things swing the other way to where there's an irrational fear.'"

"To put it differently, some economists say: What goes up must come down. One housing bear, (economist) Ian Shepherdson wrote June 6: 'Ultimately, we expect the level of home sales to head down to, or even below, the long-term trend. When bubbles burst, they usually burst properly. Gentle deflations are rare.'"

A reader posted this report from earlier this year. "(Fed) governor Donald Kohn hammered home the Fed's hawkish strategy in blunter language during a speech in Frankfurt. 'If real estate prices begin to erode, homeowners should not expect to see all of the gains of recent years preserved by monetary policy actions,' he said. In other words, no mercy now, and no bail-out later."