Home sales are forecasted to improve

Realtor study predicts sales growth
Nashville Business Journal May 7, 2008
National Association of Realtors expects home sales improvement soon Study: Expect home sales improvement soon
A National Association of Realtors study shows house sales remained soft in March, but the organization is forecasting sales will begin to improve over the summer.

The NAR's Pending Home Sales Index dropped 1 percent to 83 in March and was 20.1 percent lower than the March 2007 index of 103.9.

NAR Chief Economist Lawrence Yun says the extent of an expected recovery depends on better access to affordable loans.

"Things are beginning to improve, but the availability of affordable mortgages is uneven around the country and sometimes within metropolitan areas," Yun says. "As anticipated, we continue to look for a soft first half of the year, for both housing and the economy, before notable improvements in the second half. Some time is needed for FHA and new conforming jumbo loans to become widely available."

Existing-home sales are projected to rise from an annual pace of 4.95 million in the first quarter to 5.82 million in the fourth quarter, NAR said. Existing-home sales are likely to total 5.39 million, and then rise 6.1 percent to 5.72 million next year.

"Although more than half of local markets are expected to see price growth this year, the aggregate existing-home price will decline 2.4 percent in 2008, driven by a relatively few markets that are very oversupplied," Yun says.

NAR projects a median sales price of $213,700 and a 4.1 percent jump to $222,600 in 2009.

New-home sales are expected to fall 30.9 percent to 536,000 in 2008 before rising 10.1 percent to 590,000 in 2009. Housing starts, including multifamily units, will probably drop 29.5 percent to 955,000 in 2008, and then rise 1.3 percent to 967,000 next year, NAR predicted.

The median new-home price is estimated to fall 3.7 percent to $238,000 in 2008, then rise 5.4 percent in 2009 to $250,900.

NAR said the 30-year fixed-rate mortgage is likely to increase gradually to 6.2 percent by the end of the year, and then average 6.3 percent in 2009.