Striking a stance that it has held throughout the recent housing slump, the National Association of Realtors said late Wednesday that it expects existing home sales to rebound in 2007, while new home sales volume lags behind until 2008.
"After reaching what appears to be the bottom in the fourth quarter of 2006, we expect existing-home sales to gradually rise all this year and well into 2008," said NAR chief economist David Lereah.
"New-home sales should continue to slide, but we look for that sector to turn around later in the year," he said.
"When you put it all together, home sales may appear weak in comparison with the record surge in 2005, but they will be sustained at historically high levels that are in line with long-term demand."
The NAR forecast existing home sales to climb to 6.44 million in 2007 and 6.64 million in 2008, up from 6.48 million in 2006. New-home sales are forecasted to decline to 961,000 in 2007 from 1.06 million in 2006, rising to 971,000 in 2008. Housing starts are likely to total 1.52 million in 2007, the NAR said, down from 1.80 million units in 2006.
The trade group also said it expects the 30-year fixed-rate mortgage to reach 6.7 percent in the second half of 2007.
The NAR said it expects national median existing home prices to grow at a meager 1.9 percent to $226,200 in 2007, after rising only 1.1 percent in 2006. The median new home price is expected to increase 1.8 percent to $249,800 in 2007, following a similar gain last year. Stronger gains are forecast for 2008, according to the NAR, with existing home prices rising 3.2 percent and new-home prices increasing 3.4 percent.
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