WAITIN' ON THE FED:

Consumer prices flat in November (CBS MarketWatch, 12/15/06)

U.S. consumer prices were unchanged in November, as lower energy and car prices offset increases in costs for homeownership and medical care, the Labor Department reported Friday.

Core prices - which exclude volatile food and energy prices - were also unchanged in November, the lowest core inflation since June 2005.

The consumer price index was much tamer than expected. Economists polled by MarketWatch expected 0.2% gains for both headline and core inflation.

The flat readings could encourage the Federal Reserve to begin to relax about inflation.

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First-Timers Begin Looking at Houses Again (Ruth Simon, 12/15/06, The Wall Street Journal Online)

High home prices have helped drive many first-time buyers out of the housing market. Now, with prices falling in many areas, there are some signs that buyers are beginning to drift back.

The share of first-time home buyers dropped earlier this year to its lowest level since 1987, according to the National Association of Realtors. First-time home buyers now account for 36% of home purchases, according to a study released last month by the Realtors group, down from 40% in the three previous years.

First-time buyers play a key role in the housing market. They provide a source of new demand for homes, and they also make it possible for owners of entry-level properties to trade up, creating a ripple effect that affects higher-priced sectors of the market. Declining affordability has made it difficult for first-time buyers to buy homes in many parts of the country, an important factor in the recent housing downturn.

But as more sellers begin to cut their asking prices and rates on fixed-rate mortgages have moved lower, some real-estate agents are reporting renewed interest from people shopping for their first home. Sam Schneiderman, broker-owner of the Greater Boston Home Team, says he has seen "a real surge in first-time buyer activity" in the last two to three weeks as lower prices draw buyers who think the market may be close to bottoming out. Kevin Freadhoff, an agent with Realty Executives of Southern Arizona in Tucson, says in the past 60 days he is seeing first-time buyers "start to warm back up again. They are seeing that houses have become more affordable."