Industry News

Forecast calls for 12% dip in new-home sales

Home construction is also expected to drop in 2006

David Seiders, chief economist for the National Association of Home Builders, said he expects new-home sales to drop 12 percent this year compared to a record 1.28 million units in 2005. New-home sales in the first quarter of this year were down 10 percent from fourth-quarter 2005, and he said he expects sales to ease further in the coming months before leveling off in 2007. Seiders spoke Thursday during a National Association of Home Builders Construction Forecast Conference in Washington, D.C. Rising interest rates, affordability problems and the flight of investors and speculators have contributed to a softening demand for housing, economists said at the conference, according to an announcement by the home builders group. "After topping out in the third quarter of last year, it is pretty clear that the housing sector is in a period of transition. Sales and starts are trending lower toward more sustainable levels," Seiders said. "Hopefully, most of this decline will be due...