Slowdown

Bloomberg (05.23.06):

"Toll Brothers Inc., the largest U.S. builder of luxury homes, said fiscal second-quarter earnings rose 2.8 percent, the least in three years, and trimmed its 2006 forecast as higher mortgage rates discouraged potential buyers. Orders for Toll houses, which sell for double the U.S. average, plunged 33 percent to 2,076 in the quarter, the second decline following 10 quarters of gains, the company said on May 5 when it announced a preliminary tally of homebuilding revenue." Toll 2nd-Qtr Earnings Growth Slows; 2006 Forecast Cut

Earlier this month, Toll reduced its 2006 sales forecast, "the third reduction...since November." "Builders broke ground on the fewest homes in 17 months in April as housing starts declined 7.4 percent to an annual rate of 1.849 million, the Commerce Department said last week. The National Association of Home Builders' index of buyer traffic fell to the lowest since October 2001." Rates up too. "The housing market fell into a deeper slump as the average rate for a 30-year fixed mortgage rose to 6.6 percent last week, the highest since 2002, according to Freddie Mac." Gonna be a long Summer for real estate.