home price data takes center stage this week

QUOTE BELOW is of significance to 40.

'On a national average basis, home sales have not fallen in any year since the late 1940s,'

this would fit in nicely with the housing crash of the late 1880's early 1890's. plus 60 yrs +/- for a 3 generation major wave end equals above. the current 3 generation major wave is with us now. RIGHT NOW.

40.


ECONOMIC PREVIEW
Home price data takes center stage this week

By Greg Robb, MarketWatch
Last Update: 12:05 AM ET Sep 3, 2006


WASHINGTON (MarketWatch) -- It is the classic American success story, with an economic twist. A relatively obscure economic indicator remains unnoticed only to be discovered and put on center stage and onto the lips of Wall Street traders.
This rags-to-riches story fits the Office of Housing Enterprise Oversight home price index, to be released Tuesday and covering the April-June quarter.
The unknown report "is probably the best overall indicator of what is happening overall to home values. We think it is the most important number coming out next week," said David Berson, chief economist at Fannie Mae.
Home values are critical to the economic outlook. Economists disagree about how the housing slowdown will impact consumer spending.
The rise in home prices has been an important driver of consumer spending. Many consumers have been refinancing their mortgages based on the higher home values and using the cash to finance purchases.
"If home price growth declines there will be less of that equity takeout and that means the economy will grow less quickly," Berson said.
On a national average basis, home sales have not fallen in any year since the late 1940s, said Berson. There have been some quarterly declines, and prices have been down annually in some regions.
Many Wall Street firms don't yet forecast the index, but the general thrust of forecasts is for the index to slowdown in the second quarter, but to remain in positive territory.
In the first quarter, OFHEO said home prices rose 12.5% in the past year and 2% from the fourth quarter to the first quarter.
"The growth rate will almost certainly be lower than they were in the first quarter," Berson said.
Haseeb Ahmed, economist with JP Morgan/Chase, expects the index to decelerate to only a 2.4% annualized rate in the second quarter, the slowest pace since the third quarter of 1996.
Lehman Brothers economic team expects home prices to rise at a 4% rate, the slowest pace since the second quarter of 1998.
Berson forecasts home sales to drop by 10% in 2006. Housing will remain a strong market, just not as strong as the last two years, he said.
Home price appreciation will probably slow by the end of the year to the very low single digits, he said.
"It is going to be a pretty big jolt in some markets, less-so in others," he said.
Wednesday is other big data day
The only other big day for data will come on Wednesday.
At 8:30 a.m., the Labor Department will revise second-quarter productivity data. Economists expect overall nonfarm productivity to be revised up to a 1.5% annual rate from 1.1%. Some economists expect unit labor costs -- a key inflation gauge -- to be revised higher, although the overall consensus is for costs to remain unrevised at a 4.2% annual rate.
At 10 a.m., the Institute for Supply Management Institute will release the August non-manufacturing sentiment index. Economists look for a slight increase to 55.5% from 54.8%, with any reading over 50% showing growth.
Later that afternoon, the Federal Reserve will release its Beige Book report on business conditions through the end of August.
Policymakers want to know whether the economic slowdown is gathering momentum and whether businesses are able to pass along their increased costs, which could provide momentum to inflationary pressures. They'll want to know how consumer spending was holding up as gas prices hover around $3.00 per gallon.
The Fed is expected to hold rates again at the Sept. 20 meeting, but Fed officials stress that the decision will be dependent on the incoming data. See full story.
Greg Robb is a senior reporter for MarketWatch in Washington.