WASHINGTON – Home sales and prices will fall at a faster pace in 2007 than originally expected, a leading U.S. real estate trade association said on Wednesday.
The National Association of Realtors trimmed its sales forecast for the fourth straight month and said it now expected sale prices would drop more sharply than it previously forecast.
Sales of existing homes should hit a pace of 6.18 million units this year, down from the 6.29 million units the NAR predicted last month.
The national median sales price for existing homes should ease by 1.3 percent to $219,000 this year. Last month, the trade group said prices were expected to slip 1 percent.
The market for new homes will also soften this year, with sales and prices now expected to fall off more than the trade group had earlier forecast.
The median price for new homes will probably fall 2.3 percent to $240,800 this year while new home sales should register 860,000 units. Last month, the NAR said new home prices should remain flat while sales would hit 864,000 units.
The trade group representing more than 1.3 million real estate professionals has downwardly revised its major market indicators several times since January.
In its first annual forecast, NAR said it saw existing-home sales holding a 6.42 million unit pace for the year. Wednesday's revised outlook is off 3.7 percent from that mark.
One of the sharpest reversals has been in the forecast price change for new homes. In January, the group said the median home should appreciate 3 percent in 2007.
While the year-end totals will be weaker than it first thought, the trade group said it expected to see signs of recovery by the end of 2007 when the pace of existing home sales should increase. The recovery for new homes should lag, though, the group said.
"Home sales will probably fluctuate in a narrow range in the short run, but gradually trend upward with improving activity by the end of the year," said Lawrence Yun, the group's senior economist.