The decline helps affirm cooling in the housing sector and is consistent with other broad-based data we have seen.

The data are consistent with very gradual cooling in the housing market.

The cooling U.S. housing sector should apply a dampener to consumer spending as 2005-2006 unfolds, but some of this could be offset by still-decent job growth.

Housing is as strong as ever, and the mortgage business is as good as ever.

Although the cooling U.S. housing sector is going be a major drag on consumer spending as 2006 unfolds, consumers are starting the year in an upbeat mood, buoyed by solid labor markets. As such, U.S. consumer spending could display more early-year resilience than is currently expected.

We've never seen this size of a housing bubble before, so in a sense we're in kind of a strange place right now.