This article originally appeared on Jan. 28, 2014, on RealMoney.com. To read more content like this plus see inside Jim Cramer's multimillion-dollar portfolio for FREE... Click Here NOW.
New-home sales fell to the lowest level in three months in December as homebuyers balked at higher mortgage rates. The falloff in sales had already been foreshadowed by the 10% year-over-year decline in mortgage purchase applications.
The housing market has been a bright spot in the economy, but signs suggest that the recent back up in rates could lead to a cooling-down period. (Just as an aside, I was in the gym the other day and overheard several people talking excitedly about apartment flipping here in the city. It has been a while since that kind of talk was heard around water coolers (or treadmills as the case may be), and it's probably indicative of some kind of excess in the real estate market, at least in the short term.)
This coming Thursday and Friday will be the first Federal Open Market Committee meeting of the year and the last for Chairman Ben Bernanke. After this, he is out and probably headed to some think tank, and I hear that one potential place may be the Brookings Institution.
I'd give Bernanke a solid B-plus for his work at the Fed over the course of his tenure. He would have gotten a higher grade from me were in not for the fact that in the past year and a half, while making his regular appearances in front of Congress, he started talking about how we need to get our long-term fiscal picture in order, otherwise interest rates are going to rise and there could be trouble servicing the debt. This is just crazy talk, and Bernanke knows better. Still, it's sad to hear this coming from the guy who presides over the very institution that sets rates, and he has the power to set rates anywhere along the yield curve that he pleases.