NAHB Calls for 50-bp Fed Rate Cut

Recent problems in the mortgage markets are going to prolong the slowdown in home sales and building, according to the National Association of Home Builders, which is calling on the Federal Reserve Board to lower interest rates by 50 basis points at its next meeting.Tighter lending standards are making it harder for homebuyers to qualify for financing, according to 62% of homebuilders surveyed by the NAHB, and nearly a third of those builders said the tightening has affected sales. "The housing economy is down, it is hurting, and it doesn't look like it is going to bounce back as quickly as we'd hoped," NAHB chief executive Jerry Howard told reporters during a teleconference. NAHB chief economist David Seiders said he expects the Federal Reserve to cut the federal funds rate twice in 25-bp increments before the end of the year. But Mr. Howard urged the Fed to consider a 50-bp cut at its Sept. 18 meeting. The NAHB can be found online at http://www.nahb.com.