Industry News

Real estate forecast calls for sales to drop in 2006

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Home sales are expected to drop in 2006 while home prices continue to escalate, according to a National Association of Realtors forecast released today. The housing market for 2005 is headed for a fifth consecutive annual record, and sales activity in 2006 is expected to be the second best year in history, the National Association of Realtors announced. David Lereah, NAR's chief economist, said that market conditions are still favorable for housing. "The slowdown amounts to a tapping of the brakes on a hot market," said Lereah. "Home sales are coming down from the mountain peak, but they will level-out at a high plateau – a plateau that is higher than previous peaks in the housing cycle. This transition to a more normal and balanced market is a good thing." The 30-year fixed-rate mortgage should trend up modestly and reach 6.6 percent during the second half of 2006. Existing-home sales, expected to rise 4.7 percent to 7.1 million this year, are likely to decline 3.7 percent in 2...