Tuesday, November 14, 2006

More Fallout From The Housing Slowdown

The impact continues to propagate. Bloomberg (11.14.06):
"Home Depot Inc., the world's largest home-improvement retailer, said third-quarter net income dropped 3.1 percent, the first decline in three years as the U.S. housing market cooled. The company cut its earnings forecast."

Home Depot Net Income Falls First Time in Three Years

Bloomberg (11.14.06):
"D.R. Horton Inc., the largest U.S. homebuilder by revenue, said fiscal fourth-quarter earnings fell 51 percent as customers canceled orders for new houses. The shares rose 9.9 percent after profit beat analyst estimates.

Orders for new homes slid 25 percent to 10,430, a sign that demand continues to slow as the housing market cools."

D.R. Horton 4th-Qtr Profit Declines on Cancellations

Some are optimistic. Market Watch (11.10.06):
"The housing market is on a 'road to recovery,' the chief economist of the National Association of Realtors said Friday, but just how long that road is and how difficult a trek it will be in some parts of the country is still anybody's guess.

'There is still bad news [on home sales}, but the bad news is getting better,' said David Lereah, at the real estate trade group's annual convention here."

Housing market showing 'signs of recovery:' NAR

Some are not. Indianapolis Star (11.14.06):
"There is, of course, a reason for the gloominess and it can be summed up in one word: housing. The housing market has been severely battered. In October, housing prices were almost 10 percent lower on average than they were a year ago, the largest yearly decrease since 1970. The prices of new homes have taken the worst beating, plunging 33 percent just since April."

Dim housing market could prove pessimists right

"More people are having trouble meeting their mortgage payments. Foreclosures were up nationwide. The foreclosure rate was 43 percent higher than at this time last year. Building permits for new-home construction have tumbled about 30 percent."

"According to reports, a growing number of housing developments are completely empty. An economic report from a leading bank calls the housing problem 'the biggest residential construction bust for fifty years.'"

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