Some housing bubble news from Wall Street and Washington. "Sales of new one-family houses in November 2006 were at a seasonally adjusted annual rate of 1,047,000, according to estimates released jointly today by the U.S. Census Bureau and the Department of Housing and Urban Development. This is 3.4 percent (±12.9%)* above the revised October rate of 1,013,000, but is 15.3 percent (±13.1%) below the November 2005 estimate of 1,236,000."

From Bloomberg. "The number of homes for sale fell to a seasonally adjusted 545,000 during the month from 558,000 the prior month. Even with the decline last month, the number of unsold homes remains near a record high, making it less likely homebuilding will strengthen outright, limiting economic growth, economists said."

"Sales of new homes were down 15 percent in November from the same month last year, the Commerce Department said in today's report. The number of homes completed and waiting to be sold rose by 2,000 to 169,000 in October."

"The number of new homes available have averaged 555,000 this year through October, compared with 351,000 during the past 10 years, according to government figures. Existing home sales inventories are also near a record, averaging 3.515 million this year."

"Cancellations of purchase contracts, which aren't counted in the government's numbers, have mounted. 'That's growing,' said economist Kevin Logan. 'There is even more inventory than actual inventory numbers suggest.'"

"Hovnanian Enterprises, New Jersey's largest builder, on Dec. 18 reported a fourth-quarter loss on cancellations of new-home orders. Hovnanian customers canceled 36 percent of their contracts in the period, an increase of 25 percent, the company said."

"'We didn't have this in other slowdowns, customers walking away,' CEO Ara Hovnanian said."

"The housing slowdown is costing jobs. Builders shed 53,000 workers in the last two months, according to government reports. Manufacturers shed 59,000 workers in the same period, while goods producing companies, some at companies that produce housing- related supplies or products, cut 102,000 workers."

"'Even if sales stabilize at this level, the contraction in construction activity is still in front of us,' said Kevin Logan, chief markets economist at Dresdner Kleinwort in New York. 'That's what's going to affect the economy in the year ahead.'"

"Building permits in November fell to a 1.506 million-unit pace, the lowest in nine years, the Commerce Department reported."

From Marketplace. "Should today's new home sales figures turn out as well as expected, Chris Thornberg, of UCLA's Anderson Forecast, won't be impressed. Thornberg: 'Who cares? In many ways, the last number you should be looking at is new home sales.'"

"For one thing, he says, the number can't account for building contracts which later get canceled."

"And the survey's statistical sample is so small the number routinely gets revised. Take last October, when the Commerce Department reported a surprising 5 percent jump in sales. Thornberg : 'They've already revised it. So new home sales for October '06 is now below what it was for September '06 once the revision came in.'"

"The more important numbers, Thornberg says? Building permits, which are down, and inventory, which is up. Both point to a continued slump in the New Year."

The Street.com. "Last week, Hovnanian Enterprises said it recorded $336 million in land charges, the largest such charges among builders to date. Interestingly, Hovnanian said on its conference call that its fiscal 2007 guidance assumes zero additional impairments and land charges. While Hovnanian is optimistic, some investors believe 2007 holds more problems."

"'I think there is still more to come in impairment charges," says Carl Tash, manager of Cliffwood Partners. 'After a 15-year upside cycle [in housing] , I don't think the downturn is going to last 12 to 15 months,' he says. 'I think that's pure fantasy.'"

"'A lot of people are under the impression that this is a one-time event, but that's not the way it works. The only communities that you get to impair are the ones that are currently experiencing losses,' says Alex Barron, an analyst with JMP Securities."

"Thus far, most of the impairment charges have been for communities in California, especially San Diego. However, Barron says more writedowns are coming for Florida and Phoenix, which are in much worse condition than Southern California."

"The reason writedowns haven't occurred much in markets like Florida and Arizona is that builders are building on older, cheaper land and still making profits. Eventually, newer, higher-priced land will flow through the income statement, eroding gross margins and making the risk of impairment higher."

"'It is safe to say there will be more impairments than are being assumed by management currently, and there will be more impairments than are already taken,' says William Mack, an equity analyst with Standard and Poor's."

The Associated Press. "Prices of single-family homes across the nation rose in October at the slowest rate in almost a decade, a housing index released Tuesday by Standard & Poor’s showed. 'We can clearly see that the monthly price declines are wide spread nationally,' said economist Robert Shiller."

"The data is consistent with a report from the National Association of Realtors, which showed a tiny increase in sales of existing homes in October. The realtors association showed that the median sale price dropped to $221,000 in October, a decline of 3.5 percent from a year ago. That was the biggest year-over-year price decline on record."

"Meanwhile, the inventory of unsold homes in October reached the second-highest level ever recorded. At the pace homes were being sold in October, it would take 7.4 months to sell the currently available homes."

From Reuters. "U.S. mortgage applications plummeted last week to the lowest level in nearly five months, dragged down by a plunge in demand for home refinancing loans as interest rates nudged higher, an industry trade group said."

"Demand for home purchase loans also weakened as the MBA's seasonally adjusted purchase index, widely considered a timely gauge of U.S. home sales, fell 10.6 percent to 390.2, its lowest since late October. The index was also below its year-ago level."

From CNN Money "'We don't think there'll be a recession, but the risks have risen,' said David Berson, chief economist of Fannie Mae. He now estimates the chance of recession at 35 percent for 2007, up from a 25 to 30 percent chance a few months ago."

"'Some of the Christmas spending wasn't as strong as we'd hope,' said Berson, referring to estimates that holiday sales posted the smallest gain in four years this year. 'And I think we have not reached the bottom in housing yet.'"

"Concerned some borrowers may be over-stretching to buy homes, U.S. lending regulators on Tuesday released a new consumer handbook that warns of the risks associated with interest-only, payment-option and other exotic home loan products."

"As home prices have stalled and begun to fall, late payments and foreclosures increased in the third quarter, with the subprime adjustable rate mortgage category producing the most pronounced increase in delinquency rates, according to the Mortgage Bankers Association."

"'If housing prices fall, your home may not be worth as much as you owe on the mortgage. Also you may find it difficult to refinance your loan to get a lower monthly payment or rate,' it reads."