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A great example of the law of unintended consequences, truck sales are down 14 percent as the housing slowdown has affected builders and homeowners who would use equity to buy a vehicle. The builders and construction workers are cutting back on expenditures as new construction looks to slow in the near term. That is affecting the car companies right in the pocketbook as pick up trucks are their best selling vehicles, and the most profitable.

Now it has changed.

As home construction and prices rose in recent years, builders and their employees bought pickups for work while consumers used home-sale profits to indulge in the trendy vehicles. From 1995 through last year sales of full-size pickups surged 46 percent, becoming the domestic industry’s largest product category in sales and one of the most profitable.

So far this year, sales of the big trucks are down 14 percent, hurt by a housing slowdown that caused existing-home prices to drop for the first time in 11 years last month….

A majority of the big trucks are sold to businesses or to people who use them for work, and the building trades are heavily represented among both groups, said analyst Rebecca Lindland of Global Insight Inc. in Lexington, Massachusetts.
These buyers generally will stick with full-size vehicles if the housing market remains robust when gasoline prices rise, she said. If the housing market weakens only slightly, hefty incentives may keep truck sales going.
“But if the housing market has suddenly taken a nose dive, it doesn’t matter how good the deals are,” Lindland said. Home- sale prices were still climbing when gasoline at U.S. pumps reached a record average of $3.05 a gallon on Sept. 5, 2005, according to AAA, the nation’s biggest motoring club. The average was $2.356 a gallon yesterday.

Bloomberg.com: U.S..

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