David Seiders Builders Quotations

As they generally have done throughout 2005, builders have maintained a healthy balance between supply and demand.

There's other housing numbers showing some declines in April as well. My own survey of builders has shown them losing some momentum for the last couple of months, including May. I think there's some evidence accumulating that this supposedly highly interest-sensitive part of the economy is starting to give ground.

The weather basically gave the builders an opportunity to move things forward. No one changed their plans. But I'll probably change my forecasts for the next two months lower, even if I keep the first quarter forecast at pretty much the same level.

The big builders are marking down their outlooks for 2006 and rolling out some sales incentives -- the sort of things we see when the market starts to weaken on the demand side.

The key reason the market is losing momentum is a major decline in housing affordability measures as prices continue to move up aggressively in many, many markets around the country. There are reasons for the builders to be doing things to bolster demand, hold buyers in and limit cancellations, and I think that's what's going on out there.