The Residential Real Estate Crash Index Message Board

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Strategies & Market Trends : The Residential Real Estate Crash Index

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To: saveslivesbyday who wrote (90770)	9/27/2007 8:27:29 PM
From: Giordano Bruno	Read Replies (1) of 306849

Death of Housing Market Leads to Further Dollar Weakness The housing market is in big trouble. Not only did sales of new homes drop to a 7 year low last month, but the median price of a home sold also fell by the largest amount in 37 years. This follows an already abysmal report of existing home sales released earlier this week and collectively they provide strong evidence that the US economy is in trouble. For the past few years, the inflated value of homes helped to fuel aggressive consumer spending. Now that house prices and demand are falling while inventories are rising, people will start to become more conservative about their spending habits. The US dollar hit a new record low ahead of the new home sales figures as the record amount of subprime adjustable rate mortgages due to reset next month raised big concerns about the possibility of increased foreclosures. With non-farm payrolls due for out next Friday, the state of the labor market is coming back into focus. Jobless claims were surprisingly low last week, but help wanted ads last month fell to a record low. The market is looking for a 100k rebound in payrolls following last month’s drop. We think this is a bit overly optimistic especially considering the fact that many financial companies have announced fresh layoffs in the past month. Although we don’t expect job growth to be negative for the second month in a row, we also do not expect a significant recovery. Meanwhile there is a tremendous amount of US data due for out tomorrow. We are expecting personal income, personal spending, the PCE deflator, Chicago PMI, Construction spending and the final University of Michigan consumer confidence report for the month of September. The odds are skewed towards stronger rather than weaker data because most of these reports are either tied to inflation or the manufacturing sector. dailyfx.com

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