The Slowdown Speeds Up

Bloomberg (08.04.06):

"Hovnanian Enterprises Inc., New Jersey's largest homebuilder, said profit in the three months through July was as much as 27 percent lower than forecast after the pace of sales slowed and potential buyers canceled." Hovnanian Profit Misses Targets as U.S. Housing Slows

"'It's pretty similar to what everyone else is saying,' said Stephen East, a homebuilder analyst at Susquehanna International Group in Chesterfield, Missouri, who doesn't rate Hovnanian's shares. Hovnanian does more building in the Northeast and Mid- Atlantic areas than other companies, he said. 'Those markets have been extremely difficult.'" "D.R. Horton Inc., the third-largest U.S. homebuilder by market value, last month reported that fiscal third-quarter earnings fell 21 percent, the first quarterly drop in its 28-year history." In May, Toll Brothers, "the largest U.S. builder of luxury homes", cut its 2006 sales forecast for the third time since November, 2005. Toll is slated to announce its "outlook for its third quarter and fiscal year 2006" this coming Tuesday. Any bets it cuts its sales forecast again? A merry lot, they are not. In June, "the National Association of Home Builders/Wells Fargo's index of builder confidence declined to 42, the lowest since April 1995...." And just think. All those ARMs out there are starting to reset.