"It's softer than it was, the way it should be," said Dennis Smith, president of Home Builders Research, "because we all knew it was going to slow down sooner or later. We got away from talking about cycles and started talking about bubbles. The cycle is on the downward slope of the peak, but we're going to be OK."

Excluding apartment conversions, Las Vegas is going to be hard-pressed to match last year's record of 30,750 single-family detached new home closings, Smith said. He counted 31,010 new home building permits in 2005, down 1,869, or 5.7 percent, from the previous year.

"I think most of the big builders will struggle to meet last year's totals," he said. "Anytime you have interest rates on the rise, you're going to have higher cancellation rates. People are not able to qualify or if they haven't locked in their payment and rates during the construction of the house, if rates go up twice during that six months, they go to close and find out their payment has increased since they signed their contract. They might get cold feet."