The Washington Monthly

May 27, 2004

HOUSING BUBBLE....Yes, Virginia, there really is a housing bubble. Or at least, there used to be:

Sales of new homes tumbled 11.8 percent to a seasonally adjusted annual rate of 1.093 million units from an upwardly revised record high of 1.239 million in March, the Commerce Department said.

....April's rate was the lowest level of new home sales since November in what is normally the peak season for real estate sales. The decline — the largest monthly drop since January 1994 — could signal the end of a housing boom fueled by the lowest mortgage interest rates since the early 1960s.

Regular readers know that I've drifted back and forth on the question of whether there's been a housing bubble, though usually landing on the pro-bubble side. These numbers seem to indicate that there really has been a bubble for the past few years and that it's finally begun to burst. Hang on to your wallets.

—Kevin Drum 12:48 AM Permalink | Trackbacks | Comments (0)

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