While the housing bubble is slowly deflating since February, only now it's finally getting spectacular. First look at the PHLX Housing Sector chart, "composed of 20 companies whose primary lines of business are directly associated with the U.S. housing construction market":

It's practically in free fall now.

In the second note, the just released MBA's Mortgage Applications Index decreased 1.9% for the week and 27% since last October. It is on track for 40% Y/Y decline few months from now. Special thanks Mr. Bush and Mr. Greenspan.