M o d e r n P e r s p e c t i v e s . c o m

Toll Brothers Inc., the largest U.S. builder of luxury homes, reduced next year’s sales forecast, saying the housing market is weakening after a five-year boom. Its shares fell 14 percent, the most in seven years.

The sales forecast was cut by a range of 3.8 percent to 6.9 percent because of “some softening of demand” and delays in opening new communities

Interest rates are rising, making mortgages more costly and curbing home sales, which have hit highs each year since 2001. The housing market has accounted for 50 percent of U.S. economic growth and more than half of private payroll jobs created in that period

“Since Katrina, instead of going up $5,000 to $10,000 every week or two, we have been limited to no price increases or very limited price increases.”

Bruce Toll, the Toll co-founder…sold 502,480 shares earlier this year…leaving him with a 5.2 percent share of the builder. Robert Toll owned 18.1 million shares, or 11.6 percent of the outstanding stock, as of Aug. 31.

The Mortgage Bankers Association last week said its measure of home-purchase applications dropped to the lowest level since February. The gauge has declined in six of the last seven weeks.