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We know the housing data has been weak and increasingly so:

1. Despite falling interest rates, Mortgage activity dropped;

2. Pending sales of Existing Homes declined; Home prices fell;

3. September marked the sixth consecutive month that spending on private residential construction fell;

4. The Housing recession has spread into Consumer Spending: year-over-year change in real consumption was 2.8%, the lowest year-over-year growth since the 1H ‘03;

5. The September 2006 U.S. Foreclosure Market Report shows that foreclosures are up more than 63 percent from September 2005.

Despite all the negative data, the new meme circulating is that 'housing is stabilizing'. That then morphed into 'housing is bottoming'.

The charts suggest something else: via Bob Bronson, we see housing is only starting to roll over (click to enlarge):

housing sales

Source: Housing Is Just Starting To Roll Over