Industry News

Real estate sales to hold strong in 2006

Rising interest rates will help balance market, ease price gains

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SAN FRANCISCO -- With home sales holding at historically high levels, only modest cooling is expected next year, according to a forecast released today at the National Association of Realtors Conference & Expo in San Francisco. David Lereah, NAR's chief economist, said strong demand should keep home sales at historically high levels in 2006. "We are in the process of setting a fifth consecutive annual record for both existing- and new-home sales, but the market will be coming off of a five-year boom and experience a soft landing next year," Lereah said. "An uptrend in mortgage interest rates will cause some slowing of the sales pace, but we forecast 2006 to be the second-highest year on record and housing will continue to support the overall economy." Existing-home sales, which should increase 4.8 percent to 7.11 million this year, are projected to decline 3.5 percent in 2006 to 6.86 million. New-home sales, seen to grow by 8 percent to 1.3 million in 2005, are expected to fall 4....