Wall Street Worried About Housing

The 5.7% decline in existing home sales reported by the NAR was pretty well covered by the other blogs today so I won’t make too many comments. However, I do think it is worth mentioning that the reaction by Wall Street to the data this morning was interesting. The broader stock market seemed to not be able to digest the numbers this morning almost as if they were too big to swallow. I think the Street might have reached a new outlook, which is that that the latest numbers are indicative of a sharper downward trend in housing prices and activity than had been expected and therefore a recession or economic slowdown is more probable.


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NEW YORK (Dow Jones)--Stocks zigzagged in and out of the red as investors weighed a steep decline in oil prices, two blockbuster mergers, more earnings reports and a report that raised concerns about the strength of the housing market.
The market wobbled after the National Association of Realtors said existing home sales fell 5.7% to a 6.6 million annual rate in December, a slightly steeper decline than the 6.9 million rate Wall Street expected. Stocks soon steadied after a report showed a build in inventories of distillate fuels, including heating oil used to warm many homes in the Northeast U.S.