The housing bubble continues to deflate as evidenced by today's (1-19-06) housing start report. Nationwide housing starts declined 9%. Excluding the South, which is still recovering from Katrina, housing starts declined 21% nationwide. In the Midwest, housing starts declined 24% in December, from November's annual rate of 386,000 down to 295,000 in December. In the West, housing starts declined 22% in the month of December, from November's 553,000 annual rate down to a 433,000 annual rate. In the Northeast the decline was 14%. Below is a link to a copy of the chart from Briefing.com showing the declines.
Housing Starts

This can also be found at: Briefing.com: Housing Starts

Prices have also been declining in many parts of the country, most notably in Southern California. Typical of these price declines is the situation in San Diego, where last months housing price decline was the largest in 18 years. Prices there declined 2.7% in the month of December alone, following monthly declines in each of the previous 3 months as well. The article describing this can be found at: San Diego Home Price Decline

Again, it appears the housing bubble has finally started to deflate. Now the questions are how much will it decline and how fast.

EconomicPopulistCommentary: HousingBubbleLinks

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