Some housing bubble news from Wall Street. "Stocks plunged after Federal Reserve Chairman Ben Bernanke vowed to combat the recent 'unwelcome' pickup in inflation, even as he told an international bankers' conference that an economic slowdown 'seems now to be underway.' 'He came right out and said we're worried about inflation,' said market analyst Arthur Hogan. 'Just what the market didn't need to hear.'"

"The second quarter is proving to be troublesome for homebuilders. They have been cutting their full-year earnings projections in droves as orders look weak and cancellation rates rise. 'If it is not already painfully apparent, the soft-landing thesis for the homebuilding industry is dead,' wrote A.G. Edwards analyst Greg Gieber."

"One hedge fund manager, who plays the sector long and short, said that Monday's selloff could point to a worse-than-expected downside scenario for builder stocks, where the news gets bad at a very fast pace, rather than a slow shakeout over an extended time frame."

"'If things get really bad at the time when the Fed will not bail out (and stop raising rates), people might just say, I'm not catching anything with a falling knife,' the manager says. 'People are saying, 'I don't see this thing turning anytime soon.'''

From the Toll Brothers 10-Q release today. "We have continued to experience a slowdown in new contracts signed. This slowdown, which began in the beginning of the fourth quarter of our fiscal 2005, has continued throughout the first six months of fiscal 2006 and into the third quarter of fiscal 2006."

"The value of new contracts signed for the six-month period ended April 30, 2006 and for the three-month period ended April 30, 2006, (was) a decline of 26% and 29%, respectively, compared to the value of new contracts signed in the comparable periods of fiscal 2005."

"We believe this slowdown is attributable to an overall softening of demand for new homes as well as an oversupply of homes available for sale. We attribute the reduction in demand to concerns on the part of prospective home buyers about the direction of home prices and interest rates."

"In addition, speculators and investors are no longer helping to fuel demand..We have been impacted by an overall increase in the supply of homes available for sale in many markets as speculators attempt to sell the homes they previously purchased or cancel contracts for homes under construction, and as builders who, as part of their business strategy, were building homes in anticipation of capturing additional sales in a demand driven market attempt to reduce their inventories by lowering prices and adding incentives."

"In addition, based on the high cancellation rates reported by other builders, and on the increased cancellation rates we have experienced, non-speculative buyer cancellations are also adding to the supply of homes in the marketplace."

From Origination News. "Employment in the mortgage industry fell in April for the second month in a row. The U.S. Bureau of Labor Statistics reported that employment in the mortgage banker/broker sector slipped by 2,500 jobs, from 503,600 in March to 501,100 in April."