The homebuilders association has this out today. "Reacting to what they perceive as increasing consumer uncertainty regarding the market for new single-family homes, builders tempered their views on current and expected sales activity in the Home Builders Housing Market Index for August, released today. The HMI declined seven points to 32, its lowest level since February of 1991. This was the seventh consecutive month in which builder confidence, as measured by the index, has fallen."

"'Two big factors are coloring builders’ perceptions of the market right now, rising sales cancellations and substantial growth in inventories of both new and existing homes,' said NAHB Chief Economist David Seiders. 'These factors are largely the result of an increasing number of potential buyers adopting a 'wait-and-see' attitude because of uncertainty about where the housing market is headed. We’re also seeing an anticipated withdrawal of investors/speculators from the market.'"

"Builders in all four regions of the country are pessimistic about the market. In August, all three components of the home-builders' index fell. Current sales index fell to 36 from 43, the expected sales index dropped to 40 from 46 and the traffic of potential buyers' index fell to 21 from 27."

"Housing starts have fallen about 18% since the peak at the beginning of the year. New-home sales are down about 17% from the peak last July. As housing slows, employment in construction, real estate, banking and related retail sectors has also weakened."

"'Builders are pulling out the stops in terms of incentives to try and keep inventories down, but it's a pretty tough battle at the moment,' said Seiders. Real estate speculators, who flocked to the market in recent years, are also abandoning their bets in droves, adding to builders' supply, Seiders added. The NAHB's Seiders expects industry weakness to worsen before it improves."

"Inventories of unsold existing homes have jumped 39 percent in the year through June. The slide in builder confidence suggests the industry is 'rolling over,' Joseph LaVorgna, Chief U.S. Economist at Deutsche Bank AG, said."

From MarketWatch. "ECC Capital Corporation, a mortgage finance real estate investment trust that originates and invests in residential mortgage loans, today announced (a) loss for the three months ended June 30, 2006 of $18.6 million including accounting adjustments to increase reserves $16.4 million for expected losses on repurchased loans and to mark certain loans to the lower of cost or market."

"In addition, during the second quarter of 2006, ECC Capital disposed of certain aged and repurchased inventory at a significant discount to par, which resulted in an overall loss on sale of loans."

"Shabi Asghar, CEO of ECC Capital said, 'Unfortunately, overall results were negatively impacted by an increase in repurchase claims related to whole loan sales made in prior periods. We are currently in the process of managing through these claims. We've resold a large portion of these repurchased loans, but at a significant discount to par.'"

The LA Times. "Reflecting the slowdown in the nation's housing market, more U.S. banks reported weaker demand for mortgages in July, the Federal Reserve said Monday in a survey of senior loan officers."

"As the housing sector cools from its torrid pace, the Fed found that about 60% of respondents saw weaker demand for mortgages, which was 'a significantly larger net fraction than in the April survey,' the report said."

"The Fed also asked about the performance of so-called nontraditional mortgages, such as interest-only mortgages. 'Nearly 30 percent of banks, on net, indicated that they expect the quality of the nontraditional residential mortgage products currently on their books will deteriorate somewhat over the next 12 months,' the Fed survey said."