Catherine Reagor
The Arizona Republic

Metropolitan Phoenix’s new-home market continued its slowdown in June.

Demand from buyers continued to wane and builders pulled fewer housing permits again last month. There were 4,842 home-building permits issued Valley-wide in June, down 26 percent from last year’s record pace, according to RL Brown’s Phoenix Housing Market Letter.

For the first half of 2006, home building is down 19 percent from the same period last year. Resales are down more than 25 percent, Brown reported, and there are a record number of homes for sale in the Valley.

Nationally, home sales also slowed in June.

Although the Valley’s housing market is definitely slowing, comparisons to last year’s frenzied sales pace and appreciation gains aren’t a perfect indicator. During 2005, metro Phoenix home prices soared 50 percent and houses were selling within days.

Real estate analysts say 2004 is a better benchmark for tracking the housing market’s health. During the first half of this year, there were 29,943 single-family permits issued, compared with 28,731 for the same time period in 2004.

Rising Valley home prices and mortgage rates both are working to cool the housing market. Also, some people who signed contracts to buy new houses are canceling deals because they can’t sell their existing houses.