Industry News

Real estate sales, price increases to fall in ’06

Latest forecast is slightly less optimistic about market conditions

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Existing-home sales are projected to drop 6.8 percent this year to 6.6 million, down from a record 7.08 million in 2005, according to the latest National Association of Realtors forecast. That is down slightly from the group's previous forecast for the year, which called for a 6.4 percent drop in existing-home sales this year. The association has also lowered its expectations for new-home sales, which are forecast to fall 13.4 percent this year to 1.11 million from a record 1.28 million in 2005. In May, the association had projected that annual new-home sales would drop 11.6 percent for the year. Housing starts are likely to decline 6.2 percent to 1.94 million in 2006 compared with 2.07 million last year. The 30-year fixed-rate mortgage should average 6.9 percent during the second half of the year, and the unemployment rate is expected to average 4.8 percent in 2006. The national median existing-home price for all housing types is forecast to rise 5.3 percent this year to $23...