DALLAS (AP):
THE FIVE-year housing boom is indeed over, judging from growing statistical evidence and the performance of some of the nation's leading builders, and the slowdown is already rippling through the US economy.
In the last week, the Commerce Department reported that January sales of new single-family homes fell five per cent - the fourth decline in seven months - and the backlog of unsold new homes hit a record. And the National Association of Realtors said used home sales slipped 2.8 per cent in January, the fourth straight drop and 5 per cent below January 2005.
Builders also reported a few hiccups. Upscale Toll Brothers Inc. said signed contracts in the November-January period fell 21 per cent from a year ago, and KB Home reported more buyers backing out of contracts.
Still, the prospect of a housing slowdown appears less frightening than it did a few months ago, according to those who track the industry. There seems to be little concern that a much-touted housing bubble will lead to a collapse in sales and prices.
New Federal Reserve Chairman Ben Bernanke said last month housing would enter a moderate slowdown, but not a crash.
William Mack, a housing analyst for Standard & Poor's, predicted "a soft landing. The overall market is just taking a step back."
Explanations for the recent cooling-off vary. Many people bought homes during the past five years and are staying put. Some analysts blame a decline in consumer confidence. And interest rates have been rising, especially for adjustable mortgages that allowed people to buy more expensive homes than they could have afforded with a 30-year loan.
