NAR: Housing Will Rebound in 2007
The National Association of Realtors said today that it is pegging the fourth quarter of 2006 as the trough in the recent housing slump.
According to a statement released by the trade association on Wednesday, the NAR said it expects existing-home sales to gradually rise through 2007 and into 2008, while new-home sales are forecast to turnaround by summer.
David Lereah, NAR's chief economist, said he expected annual totals for existing-home sales to be fairly comparable between 2006 and 2007. â€œWe have to keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation,â€? he said.
â€œWe are starting 2007 from a relatively low point, so even with a gradual improvement in sales it'll be pretty much of a wash in terms of annual totals. The good news is that the steady improvement in sales will support price appreciation moving forward.â€?
Existing-home sales for 2006 are expected to come in at 6.50 million, the third highest on record, with a total of 6.42 million seen in 2007. New-home sales in 2006 should tally 1.06 million, the fourth highest on record, with 957,000 projected this year.
Total housing starts for 2006 are likely to be 1.81 million units, with 1.51 million forecast in 2007, which would be the lowest level in a decade. Builders are pulling back on new construction to support prices of remaining inventory.
The national median existing-home price for all of 2006 is expected to rise 1.1 percent to $222,100, and then gain 1.5 percent this year to $225,300. The median new-home price, after rising only 0.3 percent to $241,600 in 2006, is projected to grow 3.0 percent in 2007 to $248,900.
â€œWith all the wild projections by academics, Wall Street analysts and others in the media, it appears that much of the housing sector is experiencing a soft landing,â€? Lereah said.
â€œDespite the doomsayers, household wealth will not evaporate and the economy will not go into a recession. If you're in it for the long haul, housing is a sound investment.â€?
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