Some housing bubble news from Wall Street and Washington. "The dollar's early afternoon recovery, in the wake of a solid US jobs report for August, came to an abrupt halt on mounting concerns that the US housing market is teetering on the verge of collapse. The National Association of Realtors revealed that pending home sales slumped by 7 pct in July to their lowest level in three years."

"Paul Ashworth, senior US economist at Capital Economics, said outright falls in house prices would appear to be unavoidable if this trend continues. 'Housing is in freefall and that is the key to the economic outlook,' he said."

"David Lereah, NAR’s chief economist, said psychological factors account for much of the decline in July home sales. 'Psychological factors are causing some buyers to remain on the sidelines, waiting for prices to stabilize or for more favorable news about the market and the economy. Contributing to this hesitancy is a lot of negative news stories, but in the end we believe that underlying market fundamentals will prevail.'"

"UBS on Thursday downgraded New Century Financial Corp. and Impac Mortgage Holdings Inc. to 'reduce' from 'neutral' on increasing risk of a credit downturn. The brokerage sees early signs of worsening credit, noting several nonprime mortgage lenders increasing their repurchase reserves mainly due to early payment defaults."

"H&R Block Inc. on Thursday reported a first-quarter loss of $131.4 million, citing trouble in its mortgage business. Thursday's report came one week after Block announced it was setting aside $102.1 million to cover possible losses from having to buy back mortgages. CEO Mark Ernst expressed confidence that the expanded reserve is large enough to cover additional, foreseeable losses from forced buybacks of delinquent mortgages."

"'We are assuming that any loan that could come back will come back,' he said. Ernst said..Wall Street firms and other loan buyers in the secondary market 'have become much more stringent in their enforcement of the requirements to buy back loans.'"

"Construction spending plunged by the largest amount in nearly five years, reflecting spreading weakness in the housing industry. It was the fourth consecutive decline in residential construction and the biggest drop since January 2002, providing dramatic evidence that the nation's five-year housing boom has come to an end."

The Baltimore Sun. "Home sellers aren't the only ones pained by the sharp housing market slowdown: So are people who build houses. U.S. homebuilders and residential specialty trade employers cut 21,200 jobs in May, June and July, usually the peak building months, according to the most recent preliminary numbers from the Labor Department. The statistics, adjusted for seasonal variations, also showed a significant job loss in March."

"'Some of the larger builders have laid off as many as 30 percent of their total staff in this area,' said John Kortecamp, of the Home Builders Association of Maryland. (Builder) Chris Rachuba in Eldersburg has been getting calls from subcontractors hoping that he has more work for them, a turnaround from the days when there weren't enough subcontractors to go around. Suppliers that used to be too busy to bother with sales cold calls are descending on him, too."

A Motley Fool. "It turns out that the anecdotal evidence for falling prices may be exactly right, because a large number of housing sale prices may be based on fudged numbers. That's right, the last leg of Greenspan's bubble may be collapsing under the weight of farcical accounting."

"Many economists and commentators have begun to point out that housing prices are inflated to an unknown degree by seller concessions. These expensive sweeteners are now par for the course as desperate sellers try anything to move their houses."

"I think we're only at the tip of the iceberg when it comes to seeing other forms of mild and wild financial shenanigans that pumped this bubble to the bursting point. I've been saying for some time that I thought the appraisal business was a funky racket, and it appears to be giving some folks big problems when they want to refinance."