The national median existing-home price for all housing types is forecast to rise 10.5 percent in 2005 to $204,600 – the strongest rate of price growth in 25 years – while the median new-home price should increase 5.2 percent to $232,400, the National Association of Realtors reported today in its latest forecast for the year.

Existing-home sales are forecast to increase 2.9 percent to 6.98 million for 2005, while new-home sales are seen to rise 4.8 percent to 1.26 million this year, the association also announced today.

Total housing starts – single-family and multifamily – should grow by 3.2 percent to 2.02 million units in 2005, the highest since 1978; and single-family starts are projected to set a record of 1.67 million, the association announced.

David Lereah, NAR’s chief economist, said, “The housing market is probably close to a peak right now in terms of sales activity, but there is tremendous momentum. Sales are expected to coast at historically high levels into next year, but they will trend slightly downward.”

NAR President Al Mansell, of Salt Lake City, said, “Because there is such a tight supply of homes available for sale, we’re now projecting the national median existing-home price this year to rise at a double-digit rate. It’s a great time to sell, but it may be a better time to buy about a year from now when the market should come closer to balance. However, postponing a purchase for another year would mean higher borrowing costs, so there are advantages to getting in now – it all gets down to a buyer’s needs, resources and time horizons.”

The association expects the 30-year fixed-rate mortgage to rise slowly to 6.2 percent in the fourth quarter, reaching 6.6 percent by the end of 2006.

The U.S. gross domestic product is forecast to grow 3.6 percent this year, with the unemployment rate averaging 5 percent during the second half of 2005. The Consumer Price Index is expected to increase 3 percent this year, while inflation-adjusted disposable personal income is likely to rise 2.1 percent. The consumer confidence index should rise to 107 early next year, the association also said.


Send tips or a Letter to the Editor to or call (510) 658-9252, ext. 137.

Show Comments Hide Comments
Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
By submitting your email address, you agree to receive marketing emails from Inman.
Thank you for subscribing to Morning Headlines.
Back to top
Only 3 days left to register for Inman Connect Las Vegas before prices go up! Don't miss the premier event for real estate pros.Register Now ×
Limited Time Offer: Get 1 year of Inman Select for $199SUBSCRIBE×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription