SB, yes, slowing construction is good for home pricing, as it reduces the rate of buildup of inventory, with its negative impact on pricing.
But, slowing construction is bad for the construction guy losing his job, bad for Home Depot and Macy’s that sell fewer appliances and furnishings, bad for the mortgage broker who has fewer homes to finance, etc. Not good at all, for employment/wherewithal to pay. Reduced employment and wherewithal to pay is a major, major factor that will negatively impact the real estate market beginning in ’07.
Then, home prices will really come down, despite fewer homes coming online.
