The pace of existing-home sales is expected to rise to 5.9 million in the fourth quarter, a jump from the first-quarter pace of 4.9 million, according to NAR’s latest housing forecast released this morning. But sales of existing homes for all of 2008 are forecast to reach 5.39 million, 4.6 percent below the 2007 level, before increasing 6.6 percent to 5.74 million in 2009. The median existing-home price is expected to fall 1.4 percent to $215,800 in 2008 before recovering 3.7 percent to $223,800 next year. National median existing-home prices fell 1.4 percent last year.
New-home sales are expected to fall 25.7 percent in 2008 to 576,000, then rise 4.6 percent in 2009 to 602,000. However, housing starts, including multifamily units, are forecast to drop 26.3 percent to 999,000 this year, then fall another 0.5 percent to 994,000 in 2009. The median new-home price is likely to decrease by 3.6 percent to $238,400 this year, and then increase 4.0 percent to $247,800 next year.
The Pending Home Sales Index, a forward-looking indicator based on contracts signed in February, was 84.6, a 1.9 percent decrease from 86.2 in January and a 21.4 percent decline from February 2007. The Northwest was the only region that saw an increase in pending home sales, rising 3.2 percent, but it was still 25.4 percent below levels from a year ago. The Midwest index decreased 3.7 percent, which is 17.4 percent lower than a year ago. In the South, the index fell 5.5 percent for the month and 30.0 percent for the year, while the West decreased 9.8 percent in February and 17.1 percent from last year.
“The economy will not grow in the first half of the year,” said Lawrence Yun, NAR chief economist. “However, the combination of recent fiscal stimulus enactment and the lagged impact of monetary policy will help jump start the economy in the second half.”