NAR Projects Home Sales to Rise 13.6% in 2010

Existing home sales will increase 13.6% in 2010, with 5.69m houses sold during the year, according to National Association of Realtors (NAR) projections.

NAR also projects as many as 2.4m first-time homebuyers took advantage of the $8,000 tax credit in 2008. First-time buyers accounted for 47% of home sales in 2009, up from 41% in 2008 and a low of 36% in 2006, NAR added.

NAR projects existing home sales will total 5.01m in 2009, up 2% from 2008, and will increase again to 5.69m in 2010.

“A steady draw down of inventory will help home values to turn positive in 2010, but risks such as unemployment remain in the economy,” said NAR chief economist Lawrence Yun.

Other NAR projections include new-home sales at 397,000 this year, and increasing to 549,000 in 2010. NAR projects housing starts, including multifamily units, are expected to total 564,000 units in 2009 and grow to 752,000 in 2010.

NAR projects that 30-year fixed-rate mortgages will average 5.3% during Q409, but will increase to 5.8% by the Q410.

“We’ve seen a steady downtrend in housing inventory for well over a year and home prices appears to be in the early stages of stabilizing. With expansion of the tax credit to additional buyers through the middle of next year, and no major unforeseen events impacting the economy, home prices should rise between 3 and 5 percent in 2010, but with wide geographic differences,” Yun said.

Write to Austin Kilgore.