An Historical Document: Free Soil, Free Labor, Free Men
links for 2007-10-25

The Housing Market: GURK!!

From Bob Willis of Bloomberg. The chance of a near-term rate cut just went from 55% to 100%. The chance of a near-term (or current) recession just went from 30% to 40%:

U.S. Economy: Existing Home Sales Tumble 8 Percent: Oct. 24 (Bloomberg) -- The U.S. housing industry plunged deeper into recession last month as the August credit-market collapse made it harder for buyers to obtain loans. Sales of previously owned homes fell 8 percent in September to an annual rate of 5.04 million, the fewest since records began in 1999, the National Association of Realtors said in Washington. The decline was almost twice as steep as economists forecast, while the median price dropped the most in almost a year. Trading in federal funds futures suggests a 100 percent probability that the Federal Reserve will cut interest rates next week.... Economists had forecast resales to fall 4.5 percent to an annual rate of 5.25 million from a previously reported 5.5 million pace in August, according to the median estimate of 76 economists in a Bloomberg News survey. The previous month's sales were revised to 5.48 million....

Chances are this is not the bottom for the housing market," said James O'Sullivan, a senior economist at UBS Securities LLC in Stamford, Connecticut. "The extent to which housing is spilling over to the broader economy is still unclear, and that's what the Fed will be trying to determine between now and next week."... The number of homes for sale at the end of the month rose to 4.4 million. At the current sales pace, that represented 10.5 months' supply, the highest since record keeping began in 1999 and up from 9.6 months in August...