WASHINGTON -- The pace of U.S. home sales will fall further this year than earlier expected, but prices will drop less sharply than previously thought, a leading real estate trade association predicted Wednesday.
The National Association of Realtors trimmed its sales forecast for the sixth straight month but pared back its predicted drop in existing home values.
Existing-home sales should hit a pace of 6.04 million units this year, down from the 6.11 million units it predicted last month.
That number is still above the 5.75 million-unit annual rate that the trade association reported for the month of June. In a statement on Wednesday, the NAR's chief economist, Lawrence Yun, predicted "a modest upturn for existing-home sales toward the end of the year."
Prospective homeowners have faced tougher lending standards in recent months as investors have pulled funding from the once-hot mortgage finance market.
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Yun said the recent disruptions "will hold back sales over the short term, but long-term fundamentals are favorable," particularly the growing U.S. population.
The national median sales price for existing homes should ease by 1.2 percent to $219,300 this year, the association concluded. Last month, the trade group said prices should slip 1.4 percent.
The median new-home price will probably fall 2.3 percent to $240,800 this year, the NAR said in its monthly economic outlook.
In a separate report Wednesday, mortgage applications rose for the first time in three weeks as interest rates fell sharply and demand surged. The Mortgage Bankers Association said mortgage applications rose to their highest level since early June.
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