Industry News

NAR forecast: Existing-home sales to drop 6% in ’06

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Existing-home sales are projected to drop 6 percent to 6.65 million this year from a record 7.08 million in 2005, according to the latest annual forecast by the National Association of Realtors trade group. New-home sales, meanwhile, are projected to fall 10.9 percent to 1.14 million from the record 1.28 million last year – both sectors would see the third best year following 2005 and 2004. Housing starts are forecast at 2 million in 2006, which is 3.2 percent below the 2.07 million in total starts last year, according to the forecast. David Lereah, NAR's chief economist, said mortgage interest rates are trending up but will remain favorable. "Economic growth and job creation are providing a favorable backdrop for the housing market, but rising interest rates have an offsetting effect," Lereah said in a statement. "Home sales will move up and down somewhat over the remainder of the year but stay at a high plateau, meaning this will be the third strongest year on record." He expe...