Bloomberg has the NAR data. "Contracts to purchase previously owned U.S. homes fell for a fifth straight month as higher prices and mortgage rates discouraged buyers. The National Association of Realtors said today its index of pending home resales fell 1.1 percent to 116.3 in January. The index fell 2.6 percent to 117.6 in December. Pending sales were forecast to rise 0.3 percent."

"'Clearly, the market has slowed from the white-hot conditions that have existed over the prior years,' Ara Hovnanian, chief executive officer of Hovnanian Enterprises Inc., said. Hovnanian, the ninth-biggest homebuilder by stock market value, is seeing some of its competitors using more incentives to sell homes they've already built. Order cancellations at the company rose 'modestly' in its fiscal first quarter, to 30 percent from 27 percent the same period a year earlier, Hovnanian said."

From Inman News. "Robert P. Curran, an analyst for the Fitch Ratings agency, said builders' net new orders for the latest quarter have generally been weaker than a year ago. 'What they see or fear with sluggish-to-weak orders will translate to sluggish-to-weak revenues and some pressure in earnings,' he said. Cancellations on new-home orders have spiked in some areas, he said, such as the Greater Washington, D.C., area. 'What I see there is more a reflection on short-term investors who committed to buy a home (and then) bailing out and giving up the deposit.'"

"Phillip Neuhart, a Wachovia economic analyst, said analysts expected to see a stronger showing for January new-home sales. 'I'd like to see the inventory numbers notch down a little bit,' he said. The current level 'is not comfortable for me,' he said."

"Existing-home sales have dropped each month from September 2005 through January 2006, according to NAR. 'The question is now (whether) builders will adjust to the slower sales. My concern is that builders, just like retailers, should adjust their pipelines to what's going on,' Neuhart said. Hopefully, he added, builders will construct fewer homes for which they have not previously secured buyers."

Reuters has this report on the mortgage market. "The expansion of new types of home loans in the United States means mortgage bond holders may be exposed to bigger than expected losses if the housing market cools, Bank of International Settlements staff research said."

"An article published in the latest BIS quarterly review said the boom in private mortgage lending and the extension of loans to households with less than perfect credit histories had exposed investors to higher risks. 'The significance of this additional risk has been disguised in recent years by housing price appreciation,' researcher Allen Frankel said. But now there were signs of the market cooling."

"'To the extent that some investors may have failed to recognise the degree of sensitivity of their MBS investments to housing market developments, they may be exposed to losses in excess of what they had anticipated.'"

"Non-traditional mortgages helped extend a five-year rally in the U.S. housing market by reducing monthly payments and allowing homebuyers to afford ever-pricier houses. But some economists now worry that as interest rates rise, so will defaults as borrowers may find themselves unable to make payments, also pressuring the banks that offered the mortgages and the investors who hold much of the risk due to their purchases of mortgage-backed securities."

"The BIS said while the U.S. mortgage market was still dominated by the government-sponsored Fannie Mae and Freddie Mac, non-agency MBS issuance had almost doubled in recent years. At the same time, more than 75 percent of new loans issued by private lenders now went to borrowers who missed out on the top 'prime' credit rating and who often paid higher interest rates as a reflection of the added risk of default."

"The BIS said the common practice of using average credit scores to price mortgage pools could lead to a systemic underprediction of default risks and leave investors exposed if housing prices turned down. Market pressure, driving down mortgage costs, also made it more difficult to assess the risk of borrowers refinancing and paying off loans ahead of time, depriving investors of a revenue stream, BIS said."

And a Fed official had this, "While the housing sector may not contribute as much to growth this year and next as it has the past couple of years, Stern said concerns about the collapse of a housing bubble are overblown. 'The probability of a large and widespread decline is not great,' Gary Stern, president of the Minneapolis Federal Reserve Bank said. 'And if it occurred, I don't think the impact would be that great' on the economy."