New housing worries

Two things -- One is that homebuilder Lennar Corp. has seen a big drop in sales this month compared with a year earlier. Expiration of that government tax credit is clearly having an impact on demand. Two is that rates on 30-year fixed-rate loans have fallen to their lowest level in 39 years, according to Freddie Mac. For the week ended June 24, it's 4.69 percent. These developments are not all that surprising. The government's tax credit program was over on April 30 (sales are required to close by June 30), and it was obvious that there would be a slowdown in sales this summer. The question has been how big of a slowdown? These and other recent numbers do not bode well, though be careful about jumping to conclusions because the market has been quirky (some of the L.A. results have run counter to national trends). From Bloomberg:

"Most people are viewing the glass that is half empty right now," Toll Brothers CEO Douglas Yearley Jr. said at an investors conference sponsored by Deutsche Bank AG in Chicago today. "They are not buying." Meritage Homes Corp. expects sales for its quarter ending June 30 to fall about 25 percent below the same period last year, when the Scottsdale, Arizona-based company closed on 890 homes, CEO Steven J. Hilton said at the conference.