The National Association of Realtors this morning (August 8) again revised its 2007 home-sales forecast downward, dropping the number of anticipated existing-home sales from 6.11 million last month to 6.04 million this month and new-home sales from 865,000 to 852,000. The numbers represent a drop of 6.8% for existing homes and 22.4% for new homes from year-ago levels.
Prices, however, were revised upward. The NAR said it now expects a 1.2% decline in the median existing-home price to $219,300 in 2007 and a rise of 2% to $223,600 next year. Last month, it was projected a 1.4% drop in existing home prices. It expects the median new-home price to fall 2.3% to $240,800 in 2007, and then rise 2.3 percent next year to $246,300. Last month, the NAR had the 2007 new-home price decline at 2.6%.
Housing starts, including multifamily units, are likely to total 1.43 million in 2007 and 1.40 million next year, below the 1.80 million units started in 2006. The number for 2007 was even with last month's forecast; the number for next year was revised downward from 1.44 million.
"Existing-home sales should be relatively stable over the next few months, holding in a modest range, with some pent-up demand growing from buyers who've been on the sidelines," said Lawrence Yun, NAR senior economist. "Mortgage disruptions will hold back sales over the short term, but long-term fundamentals are favorable. A modest upturn is projected for existing-home sales toward the end of the year, with broader improvement to include the new-home market by the middle of 2008."
"With the population growing, the demand for homes isn¹t going away--it¹s just being delayed," Yun said. "More buyers, and cutbacks in new construction, will eventually draw down the inventory levels and support future price appreciation, but general gains will be modest next year.Serious buyers today have a long-term view of housing as an investment--speculators have left the market."
The NAR held to its forecast of an average 6.7% rate on 30-year fixed-rate mortgage but cut its forecast for next year from 6.7% to 6.6%.