According to the National Association of Home Builders, the real estate market is starting to rollover.
Here are some commentsfrom BCA Research (www.bcsreaseach.com):
U.S. Housing Is Slowing, Consumption Is Next
10:32:00, January 20, 2006
A cooling in U.S. housing activity is underway and should coincide with a consumer spending slowdown.
Recent data confirm that the U.S. economy is slowing. The January U.S. home builders survey was unchanged from the previous month, failing to rebound after steep losses in late 2005. Meanwhile, both housing starts and new permits were down sharply in December, underscoring the comments in yesterdays Fed Beige Book that housing activity is cooling in most districts. Housing affordability has eroded significantly due to sky-high house prices and, to a lesser extent, higher mortgage rates. Real consumption growth tends to weaken after affordability has significantly declined. Bottom line: with housing cooling, a replay of the 1995 mid-expansion economic slowdown looms.
