Sliding To Oblivion

It seems like every month brings the largest reduction in home prices and sales in forever. A day after the revised October statistics showed prices falling fast, today we have new home sales for November at a 12-year low.

Sales of new homes in the U.S. fell to a 12-year low in November, pointing to bigger declines in construction that will hobble economic growth throughout 2008.

Purchases dropped 9 percent to an annual pace of 647,000 and October sales were revised down to a 711,000 rate, the Commerce Department said today in Washington. Last month's sales were weaker than the lowest forecast in a Bloomberg survey.

The deepest housing recession in 16 years will worsen as discounts fail to lure buyers and mounting foreclosures swell the glut of unsold properties. Falling property values may cause consumer spending to cool, increasing the odds the expansion will falter in 2008.

Not only is this impacting the economy, but population patterns, which will play out in the 2010 Census and how electoral votes and Congressional seats will be apportioned for the next decade, so the political implications are evident, too.

I do see a general unease in the country, an expectation of recession, and a bracing for the worst. These are not good times to be the party in power, because people are just fed up.