Why Homebuilders Don't Want the Treasury to Regulate the GSEs

Homebuilders say GSE regulation belongs either with HUD or with some new offshoot agency of the Treasury Department. The Treasury Department, they say, isn't sufficiently concerned with encouraging homeownership. That's probably true. What the Treasury Department IS concerned with is what the heck is going with the GSEs balance sheets and derivatives books. Fannie and Freddie's lobby is powerful, though. And Congress hasn't had much luck getting the GSEs to be more forthcoming. And you can see why the homebuilders would be concerned. If Fannie and Freddie slow down their mortgage buying...it takes out support for rising home prices...which, by extension, hurts the stocks of homebuilders. The chart below shows the Philly Housing Index of homebuilders with a 50-day simple moving average. You can see that the last time the index was flat and its MA was sideways was in July, where the index briefly traded under the MA. This was during the wild summer in which the GSEs disclosed several multi-billion dollar accounting errors. Now, it's looking again like a double top with a sideways MA and some trouble in GSE land. Where do we go form here? Lower rates and another bullish run? Or a sell off? I'm looking for the latter...and buying puts (as recommended in the housing report.)