by Calculated Risk on 5/31/2006 03:26:00 PM

Reuters reports: US housing slowdown well under way, set to drag on

America's booming housing market has clearly slowed ...
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"I think that the housing market actually crested in the fall of 2005 and we've been in a gradual cool-down," said Frank Nothaft, chief economist at mortgage finance company Freddie Mac.
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So far this year, total home sales are 3.9 percent below the first four months of 2005. And despite surprising gains in March and April, sales of newly built homes are down too versus a year ago, according to the Mortgage Bankers Association.

That trade group's data also show fewer people are applying for mortgages. In fact, purchase applications year to date are down 10 percent from the comparable period in 2005.

"We're running at about 2003 levels," said Mike Fratantoni, senior economist at the Mortgage Bankers Association. "It's still a pretty strong purchase market, but not nearly as strong as it was in '04 or '05."

The number of houses up for sale offers a telling sign too, said Jeff Taylor, the National Association of Federal Credit Unions' senior economist.

Indeed, inventories are soaring. The number of new homes and existing houses on the market both hit records in April, according to the National Association of Realtors and the U.S. Commerce Department.

At the current sales pace, the number of homes up for resale amounted to a six-month supply -- the largest in more than eight years.