FED Construction Report for the South

March 2007

Dallas Regional Report

Housing markets continue to soften, and single-family construction is slowing. Demand remains weakest in the Dallas/Fort Worth area, where slowing sales and rising cancellations have boosted new home inventories to high levels. Respondents say negative housing news in other parts of the country has made buyers increasingly nervous, and some weakness is the result of investors pulling out.

Home demand is still relatively strong in other major metropolitan areas, although activity is slower than a year ago. Despite relatively strong new home sales, contacts say large national builders are reducing speculative inventory and construction (especially of lower priced homes), partly to free capital to manage their balance sheets.

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