Daily Real Estate News  |  August 8, 2007  |   Near-Term Home Sales to Hold in Modest Range
The housing market will probably hold close to present levels in the months ahead, NAR says.

Lawrence Yun, NAR senior economist, says he isn’t looking for any notable changes in sales activity.

“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,” he says. “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.”

Housing Outlook

Here's NAR's forecast for home sales in the next few months:

• Existing-home sales: expected to be at 6.04 million in 2007 and 6.38 million next year, below the 6.48 million recorded in 2006. Existing-home prices should ease by 1.2 percent to a median of $219,300 in 2007 before rising 2 percent next year to $223,600.

• New-home sales: projected to total 852,000 this year and 848,000 in 2008, down from 1.05 million in 2006. The median new-home price will probably fall 2.3 percent to $240,800 in 2007, and then rise 2.3 percent next year to $246,300.

• Housing starts (including multifamily units): are likely to total 1.43 million in 2007 and 1.40 million next year, below the 1.8 million units started in 2006.

Better Times Ahead

“With the population growing, the demand for homes isn’t going away — it’s just being delayed,” Yun says. “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.”

— REALTORŪ Magazine Online

For more economic news and research reports, visit NAR's Research division at REALTOR.org.