Sales of U.S. homes will ease modestly but should stay within a narrow range for the remainder of 2006, a real estate agents' trade group said Tuesday.
The National Association of Realtors (NAR) said in a
monthly forecast that it expects sales this year of existing
homes to fall 6.7 percent to 6.6 million units, the third
highest yearly level on record, from 7.08 million in 2005.
NAR also said it expects new home sales to fall 12.8
percent to 1.12 million units from 1.28 million in 2005, and
for housing starts to dip 6.8 percent to 1.93 million units
from 2.07 million last year.
"We should see home sales rise and fall month to month, but
don't look for any big shifts one way or the other," National
Association of Realtors chief economist David Lereah said in a
statement.
"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,
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so overall price appreciation will be at a normal rate."
NAR said it expects 30-year mortgage rates to reach 7.0
percent by the end of 2006. "We remain concerned about the
potential impact of higher interest rates in some of the more
expensive areas of the country," Lereah noted.
The Realtors group also forecast the national median
existing home price for both single-family units and
condominiums to rise 5.3 percent this year to $231,300 and for
the median price on new homes to reach $243,300, up 1.0 percent
from 2005.
But NAR President Thomas Stevens said home prices were
leveling out. "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," he said.
The association also said it expects the 2006 U.S.
unemployment rate to average at 4.7 percent and the Consumer
Price Index to be at 3.4 percent this year. U.S. 2006 gross
domestic product growth was forecast at 3.4 percent and
disposable personal income to rise 3.1 percent.
Copyright Reuters 2006.
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