Existing-home sales activity is projected to remain soft for the next few months before improving by the end of the summer, reports NAR in its latest forecast released today. Existing-home sales are projected to total 5.39 million for 2008, down 4.6 percent from 2007, and then rise 6.1 percent to 5.72 million in 2009. The median price of an existing home is forecast to be $213,700 this year, down 2.4 percent from 2007, and rise 4.1 percent to $222,600 in 2009.
New-home sales are expected to fall 30.9 percent to 536,000 units in 2008 before rising 10.1 percent next year to 590,000, NAR reports. The median new-home price is forecast to fall 3.7 percent to $238,000 this year, and then rise 5.4 percent in 2009 to $250,900. Housing starts are expected to drop 29.5 percent to 955,000 units in 2008, and then rise 1.3 percent to 967,000 next year.
The Pending Home Sales Index edged downward 1.0 percent in March and was 20.1 percent lower than a year ago. In the South, the index dipped 0.1 percent in March, but is 26.7 percent lower than a year ago. In the West, the index slid 1.4 percent and is 9.5 percent below March 2007. The index fell 10.4 percent in the Midwest in March and is 22.3 percent below a year ago. Only in the Northeast did the pending sales index show improvement, jumping 12.5 percent in March, though it is still 15.4 percent below last year’s level.
Lawrence Yun, NAR’s chief economist, says better access to affordable loans will aid the recovery process. “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.”