Some housing bubble reports from Wall Street and Washington. "Fewer Americans signed contracts to buy previously-owned homes in November, suggesting weakness in the real-estate market may extend into the new year. An index of signed purchase agreements fell 0.5 percent, a third consecutive decline, to 107 from 107.5 in October, the National Association of Realtors said. The index was down 11.4 percent from November 2005."

"The sales gains are barely starting to make a dent in inventories. The number of previously-owned homes for sale decreased 1 percent to 3.82 million last month, last week's sales report from the Realtors showed. The supply was just less than the record 3.861 million reached in July."

"Figures from the Commerce Department showed the number of new homes completed and waiting to be sold were at a record 169,000 in November."

From MarketWatch. "Regionally, pending home sales fell 2.8% in the Northeast, 1.1% in the South and 2.6% in the West. Pending home sales rose 4.8% in the Midwest. Pending sales are down about 16% year-over-year in the West."

From Bloomberg. "Anyone who thinks 'housing has bottomed should talk to Lennar,' says Paul Kasriel, chief economist at the Northern Trust Corp. in Chicago. 'Inventories of completed homes continue to increase, both in absolute terms and relative to their total inventories,' he said. 'Historically, until the relative inventories of completed homes begin to decline, the starts of new homes continue to decline.'"

"Because the Census Bureau, keeper of the new home sales data, doesn't capture cancellations in the monthly statistics, sales are probably being overstated and inventories understated."

"The lag between turning points in residential and non- residential construction is variable, economist Ian Shepherdson said, but one follows the other as night follows day. 'The plunge in housing construction promises tough times ahead, sooner or later, for the non-residential construction business,' he said."

From the Street.com. "Homebuilders rivalry is intense. The result is shrinking home prices and eroding profitability. Lennar remains the biggest bully in many markets, cutting prices and aggravating fellow builders."

"Lennar announced this week that orders were down 6% in its latest quarter, but its backlog of homes fell 42% year over year in dollar terms. JMP Securities analyst Alex Barron says those numbers imply the prices of Lennar's new orders fell at least 30%."

"'If that is remotely true, I don't see how or why any builder, public or private, will just sit there and not eventually have to begin cutting prices down to match or beat that,' Barron says."

"The only real way to hold steady on prices in such a market is to offer a differentiated product. If you travel around the country, you'll find Lennar's homes similar to other builders, Barron says. 'There is not a huge noticeable difference from one to the next,' he says."

"The threat of substitutes remains high for builders. There is a glut of existing-home inventories, and rental apartments and houses are often more affordable across the country. In some communities, builders selling new homes are facing competition from buyers looking to sell a version of an identical home purchased a year ago."

From Forbes. "Automatic Data Processing on Wednesday forecast a 40,000 decline in American jobs. If the payroll processing firm is correct, it would be the first time in nearly four years that U.S. employment rolls have declined."

"'Given the economic slowdown, particularly in housing, firms could be getting more cautious about hiring,' Goldman Sachs economist Andrew Tilton said."

"Tilton said the most vulnerable employees are those working in the residential real estate market. 'You have seen huge declines in home sales,' he said. 'Yet housing employment is just slightly off. So this sector needs to shed some employment.'"

"Members of the Federal Open Market Committee agreed unanimously in December that inflation remained the primary risk to the economy, although they acknowledged that the economy may have been a 'touch softer' than they had previously believed, according to minutes."

"All the policymakers agreed that housing remained a drag on the economy, but they noted 'some indications' that sales might be starting to stabilize. Residential investment would continue to decline for several more quarters, however. The risks of a broader drop in spending would rise 'if housing prices were to decline significantly.'"

From CNN Money. "Economist John Norris said the Fed may not look to lower rates until its May meeting at the earliest. 'Most folks will agree that we will get a rate cut at some point this year. But the minutes suggest the Fed could be on pause for a while."

From Reuters. "The U.S. House of Representatives will pass legislation this year that will create a new regulatory regime for mortgage finance companies Fannie Mae and Freddie Mac, the incoming leader of the House Financial Services Committee said on Wednesday."

"'We will pass a bill,' Rep. Barney Frank told reporters. '(It) will substantially increase the ability of the regulators to oversee Fannie Mae and Freddie Mac. That has never been in question.'"