Magazine article Mortgage Banking

Housing Market to 'Coast' in 2007

Magazine article Mortgage Banking

Housing Market to 'Coast' in 2007

Article excerpt

Following a correction in home sales and prices in 2006, expect existing-home sales to "coast" at roughly the same level in 2007, although there will be some additional decline in the new-home market, according to a forecast by the National Association of Realtors[R] (NAR), Chicago.

NAR's 2007 forecast calls for total housing starts in 2006 to likely fall 10.6 percent to 1.85 million units, and then decline another 11.8 percent to 1.63 million in 2007.

Given the huge gains in home values during the housing boom, and 2006's rise in housing inventory, overall price gains in 2006 and 2007 will be modest, according to NAR Chief Economist David Lereah.

"Home sellers are becoming realistic about current market conditions, and are now offering more competitive pricing in addition to some incentives or concessions--especially to help first-time buyers," said Lereah. "Conditions for buyers have improved because sellers are flexible now and mortgage interest rates are near historic lows. The market promises to be more balanced between buyers and sellers by early spring, supporting future price growth."

Existing-home sales, expected to fall 8.6 percent to 6.47 million in 2006--the third-best performance on record--are projected to be essentially even in 2007 with a 0. …

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