Housing Report Remains Grim

The US housing report remains grim as the release Friday by The Dept. of Commerce indicated new home sales declined 9.0% in November to an annualized rate of 647,000 units. That level marked a 12-year low and was well below the consensus estimate which had been guesstimated at 715,000. Treasuries rallied on the report with the 10-year note jumping a point and bringing its yield down to 4.07%.

The housing report is not good news for the US economy and should be taken as a warning that a 2008 recession is probably in the cards.

On Friday as you might expect the housing news weighed heavily on the home building stocks which comprised today’s worst-performing industry group (-3.2%). The thrifts & mortgage group (-3.0%) followed close behind in an association trade that was tied to a belief that demand for mortgages will remain depressed in 2008 along with the housing market.

Do not expect a soft landing in the housing market or for the US economy. 2008 will likely be a very tough year with a number of major homebuilders filling for bankrupcy protection.

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!