Industry News

Forecast: Slower-than-expected home sales in ’06

National median existing-home price projected to rise 2.8%

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The National Association of Realtors trade group has lowered its expectations for annual home sales in 2006. Existing-home sales are forecast to fall 7.6 percent this year to 6.54 million, while new-home sales are forecast to drop 16.1 percent to 1.08 million compared to the previous year. In the group's previous annual forecast, released Aug. 8, existing-home sales were expected to fall 6.5 percent this year while new-home sales were projected to fall 12.8 percent. If the latest forecast rings true, it would be the third-highest existing-home sales record on total and the fourth-highest total for new-home sales. Housing starts are projected to decline 9.6 percent to 1.87 million in 2006, compared to the August projection of a 9.1 percent decline. The market is experiencing "an inventory and price imbalance," the Realtor group reported. David Lereah, NAR's chief economist, said in a statement, "A year ago we had record home sales and tight supply with buyers bidding over the asking p...