by Calculated Risk on 4/24/2006 02:55:00 PM

From MarketWatch: UBS tempers view on home builders

"The long-anticipated housing slowdown appears to be finally upon us," wrote analyst Margaret Whelan in a research note, citing new-home sales down 21% from their July high, while new-mortgage applications are off 23% from their peak in June.

Yet she noted that markets vary by geography, reflected in the disparity in home-order growth being reported by the building companies.

Whelan's long-standing expectation was a "soft-landing" scenario, reminiscent of the corrections in 1994 and 1995, and also between 1998 and 2000, where new-home sales dipped 20% over a 20-month period.

"Of late, however, the more rapid rate of decline in demand -- down 21% in eight months -- has led us to rethink our thesis for the near term," she said. "Given tough comparisons and a proliferation in for sale listings in some of the hotter markets, demand has fallen more quickly than we expected."