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Home > Real Estate > Archives > 2006 > November > 27

Monday, November 27, 2006

Auto sales latest victim of housing slowdown

By Jeff Ostrowski | Monday, November 27, 2006, 10:53 AM

Here’s the latest unexpected consequence of the housing slowdown: Car sales are dipping.

Today’s Wall Street Journal (subscription required) reports that auto makers are sweating the combination of the housing slowdown and rising interest rates. Borrowers with adjustable rate mortgages are seeing their payments rise, leaving less cash for cars.

“In addition to California, big dealer groups say south Florida, Arizona and other areas where home values are down are also seeing declines in vehicle sales,” the WSJ reports. “The impact of the housing slump is likely to be hard on the Big Three because slower housing starts cause builders to defer purchases of pickup trucks, which are Detroit’s most profitable models.”

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