Some housing bubble reports from Wall Street and Washington. "A gauge of future home buying fell 1.1% in September, a signal that sales will be roughly flat for the next few months, the National Association of Realtors said Wednesday. The pending home sales index fell 1.1% in September. The index is down 13.6% in the past year. Home sales are also down about 14% in the past year, while building permits have plunged 27%."

"Regionally, the pending home sales index in the Midwest was down 18.5% year-on year. Pending sales in the West and are down 15.2% in the past year. Pending sales in the South are down 9% year-over-year. Pending sales in the Northeast are down 15.9% in the past year."

"U.S. construction spending fell an unexpected 0.3 percent in September led by a sixth straight drop in private residential building, a government report said Wednesday."

"The overall headline number was driven by a 1.1 percent decline in private residential construction, which has fallen for six straight months."

From Inman News. "Lenders still like the loan-to-value odds, which have 51 percent of all equity in American households untapped. Half, then, of all 'borrowable' equity in residential real estate is (technically anyway) up for grabs."

'"Fifty-one percent: that's an enormous amount of home equity,' declares IndyMac Bank CEO Michael Perry. This makes Perry bullish on reverse mortgages, so far a niche product for older homeowners."

"One reason for IndyMac's interest in boutique products may stem from major changes in store for the mortgage market next year, changes described in vivid terms by none other than Fannie Mae's CEO Daniel Mudd. 'There is going to be some dislocation,' he warns. 'There are going to be some unforeseen twists and turns in the market in 2007, because the 'pressure dome' is just too big for that not too happen.'"

"Mudd says, 'Nobody knows exactly what it's going to be," but he sees both crisis and opportunity coming as a result. The question is whether 'the structure of the market is sufficiently robust to deal with the uncertainties.'"

"Applications for mortgage loans dropped last week by 3% compared to the prior week, as consumers shrugged at lower interest rates, the Mortgage Bankers Association reported Wednesday."

"Mortgage applications are down 11.2% in the past year. Applications for loans to buy a home declined 1.8% on a week-to-week basis, to the lowest level in nearly three years. Purchase applications are down 29% from their peak in the summer of 2005. Also lower, applications to refinance a current loan fell by 4.5% last week. Refinancing loan volumes are down about 42% from the 2005 peak."

"Compared to July this year, the S&P/Case-Shiller composite index showed prices fell in six of ten major cities tracked by the index: Miami, New York, San Francisco, Washington, San Diego and Boston."

"'Home price gains definitely appear to be wearing away,' economist Robert Shiller said. 'Not only do we continue to see shrinking gains but actual declines in most cities.'"

From Seattle PI. "At least 1,000 Washington homeowners paid higher mortgage rates than they had to without getting proper notification, according to a lawsuit that a federal judge certified for class-action status."

"The lawsuit says NovaStar notified the borrowers of the 'yield spread premium' arrangement the day of closing, or not at all, despite federal and state laws requiring such disclosure within three days of a loan application."

"Matthew Geyman said lawyers randomly reviewed 153 loan files and found nearly 70 percent did not properly disclose yield spread premiums. Based on this, they estimate at least 1,000 people across Washington, and possibly several thousand, were affected from July 30, 1999, to now."

From Fortune. "'I don't think we've felt anywhere near the brunt of all the adjustable-rate-mortgage resets and the massive increase in defaults and foreclosures in states like California,' says Liz Ann Sonders, chief investment strategist at Charles Schwab. 'Housing downturns happen in a fairly slow-motion way, and I really think we're just at the beginning.'"

"'I don't think the macro statistics reflect accurately what's going on in many local markets,' says Bruce Karatz, CEO of national home-builder KB Home. In many once-hot regions, order cancellation rates are running above 40 percent, new-home sales volume has dropped 50 percent, and new-home prices are down 10 percent to 25 percent."

"Karatz says the current downturn is worse than any he has seen, even the early 1990s market that left so many big builders reeling."

The Associated Press. "An AP-AOL Real Estate Poll found that more than one-third - 36 percent - of those surveyed with adjustable-rate mortgages worry that they won't be able to afford their monthly mortgage payments if their interest rates increase."

"The future is gnawing at homeowner Scott Klimek. Klimek bought his home in Brighton, Colo., with a five-year ARM. 'If it was, like, this year that it was going to adjust, then I would really be worried, but I'm just moderately worried,' says Klimek."

"Joann Clapp of Cynthiana, Ky., has suffered a double whammy. She recently moved and hasn't been able to sell her old home, so she is paying on two adjustable-rate mortgages. The rise in interest rates has hurt her finances 'big time,' she says."

"'Many Americans have lost the view of the so-called starter house,' says Lynn Reaser, chief economist at Bank of America. 'People may want to take a more conservative view of that first home before they move to the mega-mansion.'"