Housing market cools, builders show uncertainty
May 25, 2006,
Washington -- The U.S. housing market continued its long-anticipated cooling off during April as sales of existing homes and housing starts both headed south for a second straight month.
And while sales of new homes are still going strong, builders seem to betting that it won't last for long -- housing starts fell for a third straight month, diving by 7.4% in April. Indeed, with builders growing antsy about tying up their cash, and forced to offer incentives to get a deal done, starts have tumbled by 18.4% in just three months, since January.
Commenting on the outlook, David Lereah, chief economist for the National Association of Realtors, said, "Our leading indicator for pending home sales was trending lower, and our forecast model is showing a modest decline for the second quarter, with sales leveling out before rising in the fourth quarter."