NAR: Resale home prices to fall 9.3% in '08

The National Association of Realtors expects a 9.3 percent drop in the median price of resale homes and a 7.8 percent drop in the price of new homes this year, with sales of resale homes sliding 12.3 percent and sales of new single-family homes falling 37.3 percent.

This latest forecast, released today by the Realtors trade group, also anticipates a 0.4 percent rise in resale home prices next year and a 4.5 percent increase in 2010, with sales of resale homes up 4.7 percent next year and rising another 6.9 percent in 2010.

The forecast projects 4.96 million sales of resale homes and 486,000 sales of new single-family homes this year -- that compares with 5.65 million sales of resale homes and 775,000 single-family new-home sales in 2007.

NAR expects unemployment to jump from an annualized rate of 5.7 percent this year to 7.9 percent in 2009 and 8 percent in 2010. And the average interest rate for 30-year fixed-rate mortgages is expected to fall from 6.1 percent this year to 5.8 percent in 2009, and then to rise to 6.2 percent in 2010.

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