Some housing bubble reports from Wall Street and Washington. "Standard Pacific Corp. today reported the Company's 2006 second quarter operating results. Stephen Scarborough, CEO, stated, "We are impacted by growing levels of both new and existing home inventories..these conditions have resulted in lower sales rates and higher levels of cancellations which have given rise to a greater use of incentives and other forms of discounting."

"Other income (expense) for the 2006 second quarter includes a pre-tax charge of approximately $16.3 million related to the write-off of deposits and capitalized pre-acquisition costs for abandoned or uncertain projects. Net new home orders were off 56% year-over-year in Southern California on a 33% higher average community count. The lower level of sales activity in Southern California was due to..a doubling of our cancellation rate. In Northern California, net new home orders were down 48%."

"Net new home orders were down 67% in Florida, (on) a nearly threefold increase in our cancellation rate. In Arizona, net new home orders were down 62% on a 100% higher average community count. The Phoenix market is clearly experiencing challenging market conditions for new and existing homes as evidenced by the surge in our cancellation rate during the second quarter and the increasing need for incentives to sell homes."

The US Census Bureau. "National vacancy rates in the second quarter 2006 were 9.6 percent for rental housing and 2.2 percent for homeowner housing, the Department of Commerce’s Census Bureau announced today. The Census Bureau said the rental vacancy rate was not statistically different from the second quarter rate last year (9.8 percent) or the rate last quarter (9.5 percent). For homeowner vacancies, the current rate was higher than a year ago (1.8 percent), and also higher than last quarter (2.1 percent.)"

From the investment bank to the housing bubble. "Friedman, Billings, Ramsey Group, Inc.today announced a net after-tax loss for the quarter of $30.2 million. For the second quarter, FBR earned $126.4 million in interest on its mortgage investments compared to $135.1 million in the second quarter of 2005. The portfolio yield was 6.39% with a corresponding cost of funds of 5.38%."

"At the end of the quarter, the unpaid principal balance of the mortgage portfolio was approximately $8.6 billion."

The yield curve is inverting. "Treasuries rose, pushing yields on 10-year notes below 5 percent, after U.S. economic growth slowed more than forecast by analysts, raising expectations the Federal Reserve will stop raising interest rates next month."

"'Housing is ugly,' said Adam MacKillop, a U.S. fixed- income trader. The impact of around half of the Fed's 4.25 percentage points of rate increases since June 2004 hasn't reached the economy yet, MacKillop said. There's a lot of this tightening that hasn't hit the mortgage refinancing.'"

From Reuters. "The shifting foundation of the U.S. housing market is sticking buyers with their old homes for longer, pushing many to slash prices and take on even more debt in the form of so-called bridge loans."

"'These loans are more for the individual who is in dire straits, who has bought a house and can't sell' the existing home, said Bob Moulton, president of Americana Mortgage Group in Manhasset, New York. 'That person ends up carrying the new house, the old house and the bridge loan. I'm seeing the reliance on bridge loans now more than ever.'"

"'Bridge financing is necessary in a short-term situation, but if a homeowner carries the bridge financing for an excess period of time, he could be forced to sell at a lower price, contributing to softer sales prices,' Moulton said."

"The rise in bridge loans 'is further evidence of a slowing in the market, and of the lack of planning that most homeowners do in making these types of decisions,' said Dave Savage, CEO of an Irvine, California-based company that provides mortgage-planning software to loan officers."