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Last Updated: Tuesday, 15 August 2006, 20:25 GMT 21:25 UK
US house market 'at 15-year low'
New homes being built in the US
Interest rate rises appear to have cooled the US housing market
Optimism among US house builders has fallen to its lowest level in 15 years, the latest sign that a once booming market has now slowed sharply.

The National Association of Home Builders' index of sentiment fell seven points to 32 in July, its lowest level since February 1991.

Analysts said the housing market has cooled as interest rates have continued to rise, making mortgages more costly.

US interest rates were held at 5.25% in August after 20 consecutive increases.

While the Federal Reserve's main aim for the increases was to keep general inflationary pressures under control as the US economy grew, it also cautioned last year that an overheating housing market was a specific concern.

Its comments came after the US housing market has boomed in recent years, aided by both the growing economy and low interest rates.

'Tough battle'

David Seiders, chief economist of the National Association of Home Builders, said his members faced a "pretty tough battle at the moment".

He added that home buyers are "adopting a 'wait-and-see' attitude because of uncertainty about where the housing market is headed".

Separate US figures showed on Tuesday that sales of existing homes fell nationwide to an annual rate of 6.693 million units in the April to June quarter, down 7.5% on the same period last year.

The declines were led by the formerly booming states Arizona, Florida and California.

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