WASHINGTON (July 11, 2006) - Home sales are projected to ease modestly but
should stay within a relatively narrow range over the balance of the year,
according to the National Association of Realtors.
David Lereah, NAR's chief economist, said the market is showing signs of
stabilizing. "The major housing indicators have been moving up and down
within a reasonable range, which means the market should even-out just below
present levels," he said. "At the same time, housing inventory levels are
balanced in much of the country, so overall price appreciation will be at a
normal rate. We should see home sales rise and fall month to month, but
don't look for any big shifts one way or the other."
Existing-home sales are expected to decline 6.7 percent to 6.60 million in
2006 from 7.08 million last year. That would still be the third highest
level on record. New-home sales should fall 12.8 percent this year to 1.12
million from 1.28 million in 2005. Housing starts are forecast to decline
6.8 percent to 1.93 million this year from 2.07 million in 2005.
The 30-year fixed-rate mortgage is likely to reach 7.0 percent by the end of
the year.
"The uptick in interest rates has been slowing home sales," Lereah said. "We
remain concerned about the potential impact of higher interest rates in some
of the more expensive areas of the country."
NAR President Thomas M. Stevens from Vienna, Va., said consumers who have
been on the sidelines should feel more confident about the market
normalization. "When it comes to big ticket purchases, buyers are more
comfortable in a stabilizing environment," said Stevens, senior vice
president of NRT Inc. "At the same time, home sellers in most areas
understand that the period of abnormal price growth is over, and they have
become more realistic about the current market. This is helping to ease the
pressure on home prices in some areas."
The national median existing-home price for all housing types is expected to
rise 5.3 percent to $231,300 in 2006. With more construction in lower cost
regions as well as price incentives that are helping to clear unsold
inventory, the median new-home price should increase 1.0 percent this year
to $243,300.
The unemployment rate is projected to average 4.7 percent in 2006, while
inflation, as measured by the Consumer Price Index, is forecast at 3.4
percent. Growth in the U.S. gross domestic product is expected to be 3.4
percent this year, and inflation-adjusted disposable personal income is
likely to grow 3.1 percent.
The National Association of RealtorsR, "The Voice for Real Estate," is
America's largest trade association, representing more than 1.3 million
members involved in all aspects of the residential and commercial real
estate industries.
# # #
Existing-home sales for June will be released July 25; the Pending Home
Sales Index is scheduled for August 1 and the next forecast will be August
8.
Posted by Donald Urschalitz P.A. at July 14, 2006 07:54 PM
