NAR Says Housing Outlook Cloudy

Washington, DC, Sept. 9, 2008-- In a sign that the U.S. housing market may weaken in coming months, an index of sales contracts on previously owned U.S. homes fell 3.2% in July from the prior month, the National Association of Realtors reported Tuesday.

The index was also down 6.8% from the last year.

Pending home sales in July were mixed regionally, with a decline of 10.6% in the West, and 7.5% in the Northeast. In the South, there was no growth. And in the Midwest, there was a gain of 2.8%.

The June pending home sales index was revised to a gain of 5.8% from a prior estimate of a 5.3% increase.

Dramatic differences between local markets have been ongoing, according to NAR.

"Contract signings have been steaming ahead, nearly doubling in activity from a year before in several California and Florida markets," said Lawrence Yun, NAR's chief economist, in a statement.

"The outer Washington, D.C., exurbs also are coming around very strongly. The Northeast region retreated following a robust gain in the previous month, and soft activity was observed in the broad midsection of America despite very affordable conditions."

He added that the outlook for the housing market is "very cloudy."

"The economy is producing more, yet cutting jobs. A first-time home buyer tax credit and lower interest rates on newly conforming jumbo loans favors consumers, yet buyer confidence remains low," Yun said.

Existing-home sales are projected to total 5.01 million this year, and rise 6.9% next year, according to NAR. Home prices are expected to rise 2% to 4% next year, after declining an average of 4% to 7% this year. NAR also expects new-home sales of 508,000 this year, and 463,000 next year, down from 775,000 in last year. End of Story