David Lereah Modest Quotations

Mortgage interest rates were at the highest level since the third quarter of 2003. At the same time, we've seen strong double-digit appreciation in home prices, so a modest slowing from record sales was to be expected. The good news is that home sales are being sustained at historically high levels.

The underlying fundamentals of the housing market are solid and sales will stay historically strong, but they will trend modestly down from current peaks. Masked by the data are early signs that housing is starting to wind down from a boom and will transition into an expansion - in other words, a soft landing.

The current pace of home sales activity remains historically strong - only eight months have had a higher sales pace. A modest downtrend, to a sales volume that is expected to be the second-best year ever in 2006, will be good for the long-term health of the housing sector.

A lot of demand has been met over the last five years, and a modest rise in mortgage interest rates is causing some market cooling.

A modest slowdown in home sales, coupled with improvements in the housing inventory, means the market is in the process of normalization.

A modest downtrend will be good for the long-term health of the housing sector.

A modest downtrend to a sales volume that is expected to be the second-best year ever in 2006 will be good for the long-term health of the housing sector.