Housing Numbers Not Looking Good

It seems that August was not a good month for new home sales, and sales usually drop off around the holidays, anyway. Sure, Wall Street rallies because they think that the Fed will ease, make credit cheap, and everyone will be happy. I'm not sure that will help on Main Street where people can't pay their new ARM adjusted mortgages. Worse, if the Fed lets inflation get out of control it will make long term rates go up and mortgages more expensive. That won't be good for housing. I'm not pessimistic, but when walking a fine line you need to keep your eyes on the risks.