Industry News

NAR: New-home sales to drop 24% this year

Forecast calls for 1.7% slide in resale home price

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The National Association of Realtors has lowered expectations for 2007 home sales, according to the group's latest forecast report. Existing-home sales are expected to drop 8.6 percent this year compared to 2006, with new single-family home sales and housing starts falling 23.8 percent, the association announced today. In its previous forecast, released last month, the trade group had predicted a 6.8 percent dip in existing-home sales and an 18.9 percent drop in new single-family home sales this year compared to last year. The existing-home sales forecast is down 7.8 percent and the new-home sales forecast is down 16.3 percent compared to the association's annual forecast released in January. "There's been an unusual hit to home sales, starting in March when subprime problems emerged and more recently when problems spread to jumbo loans, with many potential buyers on the sidelines," said Lawrence Yun, NAR senior economist, in a statement. Yun said that the jumbo loan market...