Looking forward, we can be unequivocal: New home sales have to fall, because the level of demand for new mortgages for house purchase recently has not been sufficient to sustain current sales rates.
Our guess now is that there will be some incremental decay of consumers' expectations, especially in the New York area, but it will not be sufficient to upset our basic recovery story,
The Fed will deal with (the housing-jobs mix) by hiking in January and March and hoping that the housing softening will be sufficient to get them off the hook by May, though I think that's a close call.