by Euric » Tue 27 Dec 2005, 14:01:25
$this->bbcode_second_pass_quote('cube', '[')url=http://quote.bloomberg.com/apps/news?pid=10000006&sid=ao.snEJm2iL8&refer=home]U.S. Economy: November New Home Sales, Equipment Orders Fall[/url]
I think this sums it up pretty well
$this->bbcode_second_pass_quote('', ' ')Dec. 23 (Bloomberg) -- Americans bought fewer new homes than expected in November and businesses trimmed orders for most types of equipment, suggesting two areas of strength in the U.S. economy are wavering.
Purchases of new homes fell 11.3 percent, the biggest drop in almost 12 years,
Doomers rejoice! Of course 1 month of data does not define a trend but I think that's a sign. What happens next will be pyschological. It all depends how people react:
1) Oh no the ship is sinking.
or
2) Steady as she goes arghhhh.
I think 2006 will be an "interesting" year....more so then 2005.

It could possibly be a trend. It isn't possible for the American home owner to see his income decline and still be able to afford ever increasing home prices. When older dwellings start to exceed 200 k$ in value someone is going to say this home isn't worth what their asking. Then the desire to buy starts to drop off. I know we are talking about new homes, but if "pre-owned" homes are barely affordable, think how much more unaffordable a new home is. Then after you buy it, you still have to furnish it at a cost, that will surely but the average middle class family in bankruptcy.
Things are so bad, that lenders are offering 40 year loans.
But, you all can rest well tonight, because even if housing sales continue to drop, the government fudgers will cook the books and claim next month housing sales leapt 20 %, negating the November drop. If the Us can fib about growth and unemployment, they can do it with sales statistics too.