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Photo: Drew Angerer/Getty Images

December was a rough month for housing, writes the Wall Street Journal's Justin Lahart, referring to the 6.4% drop in existing home sales. Lahart says a January bounce may not happen.

One big quote: "While a bounce can’t be ruled out, the housing recovery’s best days probably are behind it," he writes.

The big picture: "The drop in home sales came despite a decline in mortgage rates."

  • Part of the problem was that the things that brought about the decline in rates — worries over the economy and tumbling stock prices — likely made would-be buyers nervous. And because it takes time to close on a house, the sales drop also probably reflected the higher rates in previous months.

The state of play: The shutdown is also likely to make things worse in coming months.

  • "There are about 800,000 federal employees who are either furloughed or working without pay as a result of the government shutdown. Buying a home can’t be top of mind for many of them."

On the other hand: Bank of America economist Michelle Meyer disagrees, writing in a note on Tuesday: "Don’t believe the narratives of a housing collapse."

  • Meyer argues that the challenges facing the housing sector “should only be a slight drag on growth” and notes, “the recent decline in mortgage rates is well timed, ahead of the spring selling season.”
  • "Sentiment among U.S. homebuilders rose last week for the first time in three months amid a decline in borrowing costs, even as home sales have slumped."
  • "We suspect that potential homebuyers who may have been scared from the market during the period of rising rates in the fall could see it as an opportunity to jump back in."

Go deeper: Home improvement retailers play down sluggish housing market

Go deeper

2 hours ago - Politics & Policy

Kellyanne Conway's parting power pointers

Kellyanne Conway addresses the 2020 Republican National Convention. Photo: Nicholas Kamm/AFP via Getty Images

Kellyanne Conway has seen power exercised as a pollster, campaign manager and senior counselor to President Trump. Now that his term in office has concluded, she shared her thoughts with Axios.

Why it matters: If there's a currency in this town, it's power, so we've asked several former Washington power brokers to share their best advice as a new administration and new Congress settle in.

3 hours ago - Politics & Policy

GOP holdouts press on with plans to crush Cheney

Screenshot of emails to a member of Congress from individuals who signed an Americans for Limited Government petition against Rep. Liz Cheney. Photo obtained by Axios

Pro-Trump holdouts in the House are forging ahead with an uphill campaign to oust Rep. Liz Cheney as head of the chamber's Republican caucus even though Minority Leader Kevin McCarthy told them to back down.

Why it matters: What happens next will be a test of McCarthy's party control and the sincerity of his opposition to the movement. Cheney (R-Wyo.) is seen as a potential leadership rival to the California Republican.

Democrats aim to punish House GOP for Capitol riot

Speaker Nancy Pelosi passes through a newly installed metal detector at the House floor entrance Thursday. Photo: Drew Angerer/Getty Images

House Democrats plan to take advantage of corporate efforts to cut funding for Republicans who opposed certifying the 2020 election results, with a plan to target vulnerable members in the pivotal 2022 midterms for their role in the Jan. 6 violence.

Why it matters: It's unclear whether the Democrats' strategy will manifest itself in ads or earned media in the targeted races or just be a stunt to raise money for themselves. But the Capitol violence will be central to the party's messaging as it seeks to maintain its narrow majorities in Congress.