Realtors Predict Annual Price Drop,
Lower Forecasts for Home Sales
By CAMPION WALSH
April 11, 2007
WASHINGTON -- A real-estate trade group lowered its forecasts for U.S. home sales this year, while projecting what would be the first annual decline in the median national existing home price since it began keeping records in the late 1960s.
In its latest forecast for the real-estate market, the National Association of Realtors projected that existing home sales will fall 2.2% this year to 6.34 million, compared with its previous forecast of a 0.9% decline. The NAR said new home sales are likely to fall 14.2% to 904,000, compared with the prior forecast of a 10.4% drop.
"As home sales moderate, overall home prices will be essentially flat this year," said NAR Chief Economist David Lereah.
The national median existing home price will likely slip 0.7% to $220,300 in 2007, following a 1% gain last year, while the national median new home sale price is projected to rise 0.4% to $246,200 this year after gaining 1.8% last year.
The trade group attributed the market softening to tighter lending standards and the fallout from troubles in the subprime mortgage market.
Mr. Lereah said the housing market should still take support from inventories that remain well below levels of the last market downturn in the early 1990s and supplies that are close to balanced in many areas.
As for 2007, the economist said price trends are being distorted for at least the first half of the year by a shift in sales activity to moderately priced regions and away from high-cost ones. "Within given markets, most areas can expect minor price gains," he said.
The NAR projects modest price growth next year, with the median existing home price expected to rise 1.6% and the median new home price foreseen up 2.0%.
As homebuilders adjust to changing markets, the realtors group projects housing starts will slow further this year to register an 18% decline to 1.47 million, following last year's 13% decrease. Housing starts are expected to recover somewhat next year, with a projected 5.1% increase.
Lower Forecasts for Home Sales
By CAMPION WALSH
April 11, 2007
WASHINGTON -- A real-estate trade group lowered its forecasts for U.S. home sales this year, while projecting what would be the first annual decline in the median national existing home price since it began keeping records in the late 1960s.
In its latest forecast for the real-estate market, the National Association of Realtors projected that existing home sales will fall 2.2% this year to 6.34 million, compared with its previous forecast of a 0.9% decline. The NAR said new home sales are likely to fall 14.2% to 904,000, compared with the prior forecast of a 10.4% drop.
"As home sales moderate, overall home prices will be essentially flat this year," said NAR Chief Economist David Lereah.
The national median existing home price will likely slip 0.7% to $220,300 in 2007, following a 1% gain last year, while the national median new home sale price is projected to rise 0.4% to $246,200 this year after gaining 1.8% last year.
The trade group attributed the market softening to tighter lending standards and the fallout from troubles in the subprime mortgage market.
Mr. Lereah said the housing market should still take support from inventories that remain well below levels of the last market downturn in the early 1990s and supplies that are close to balanced in many areas.
As for 2007, the economist said price trends are being distorted for at least the first half of the year by a shift in sales activity to moderately priced regions and away from high-cost ones. "Within given markets, most areas can expect minor price gains," he said.
The NAR projects modest price growth next year, with the median existing home price expected to rise 1.6% and the median new home price foreseen up 2.0%.
As homebuilders adjust to changing markets, the realtors group projects housing starts will slow further this year to register an 18% decline to 1.47 million, following last year's 13% decrease. Housing starts are expected to recover somewhat next year, with a projected 5.1% increase.
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