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reflections on yesterday’s resale housing numbers

David Rosenberg:

The deteriorating inventory situation could suggest that prices may decline instead of remaining stable over the coming months. In June, months’ supply ticked up to 6.9 months, the highest since March 2009. Rising inventories are not limited to the existing home market — we estimate that builders have been building inventories of new homes for about eight months or so.

BMO Capital Markets

…Sales were also front end loaded in 2010 ahead of the HST and are now in rapid reverse. While the headlines may look soggy for the next few months, there are reasons to believe the market could soon regain its balance—long term mortgage rates have dropped, employment remains on a roll, and prices have stabilized

TD Economics

…it comes as no surprise that the housing market continued to cooling from the record levels of activity established last year. After improving markedly in 2008, home affordability eroded significantly in 2009… Nonetheless, the housing market slowdown should be cushioned by an improving employment and income picture. The level of interest rates remains quite supportive of sales activity, and rising interest rates would only occur against a stronger overall economic backdrop.

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