Existing-home sales are expected to remain flat for the next few months at an annual level of 4.9 million before beginning a gradual recovery at a 5.8-million pace in the second half of this year, NAR announced in a forecast released this morning. But total existing-home sales for 2008 are projected to be 5.38 million, 4.8 percent below the 2007 level, and rise 3.5 percent to 5.60 million in 2009. The median sale price of existing homes is projected to fall 1.2 percent to $216,300 this year, then increase 3.5 percent to $223,800 in 2009.
New-home sales are expected to drop 23.7 percent to 590,000 this year before rising 7.2 percent to 633,000 in 2009, reports NAR. Housing starts are projected to fall 25.1 percent to 1.01 million units in 2008 and slip another 2.7 percent to 987,000 in 2009. The median new-home price is expected to fall 6.1 percent to $232,200 in 2008 and rise 5.1 percent in 2009.
The Pending Home Sales Index (PHSI), a forward-looking indicator based on contracts signed in January, remained unchanged from December, but was 19.6 percent below a year ago. The PHSI in the West jumped 13.0 percent in January, but was 12.7 percent below a year ago. The index rose 0.6 percent in the Midwest but is 13.3 percent below January 2007. The PHSI fell 4.1 percent in the Northeast and was 28.0 percent below a year ago, and it fell 6.1 percent in the South, which was 23.8 percent below January 2007.
Lawrence Yun, NAR’s chief economist, said the steady January index data gives reason for optimism. “This additional sign of a stabilizing market is encouraging, and our members are telling us there’s been a pickup in shopping activity,” he said. “Our hope is that the increased traffic of buyers looking at homes will translate soon to more contract offers.”