Realtors Association Trims Housing Forecast Again

Washington, DC, September 11, 2007—The National Association of Realtors cut its existing-home forecast for the seventh straight month and widened its predicted drop in existing home values.

The NAR said existing-home sales should hit a pace of 5.92 million units this year, down from the 6.04 million units it predicted last month.

The national median sales price for existing homes should ease by 1.7% to $218,200 this year. Last month the trade group said prices would slip 1.2%.

The median new-home price will probably fall 2.2% to $241,100 this year, the NAR said in its monthly economic outlook.

Lawrence Yun, NAR senior economist, said unusual disruptions in the mortgage market are dampening the outlook for home sales, notably for August and September.

“There’s been an unusual hit to home sales, starting in March when subprime problems emerged and more recently when problems spread to jumbo loans, with many potential buyers on the sidelines," Yun said.

“However, the jumbo loan market is now beginning to settle, and FHA-insured loans are helping to fill the subprime vacuum. The volume of existing-home sales this year will be better than 2002, which was the second year of the housing boom.”