An index that gauges pending sales of previously owned homes dropped 24.2 percent in December 2007 compared to December 2007, the National Association of Realtors reported, and the group expects sales to drop 4.8 percent this year compared to last year.
The Pending Home Sales Index stood at 85.9 in December 2007. The index is based on contracts signed, and it is considered a leading indicator because a sale is typically finalized within one to two months of signing.
An index score of 100 is equal to the average level of contract activity in 2001, which was the first year examined for the index and the first of five consecutive years of record sales of resale homes.
Regionally, the index dropped 27 percent in the South, 26 percent in the Northeast, 24.1 percent in the West and 17.3 percent in the Midwest in December 2007 compared to December 2006.
Also today, the Realtor group released its latest housing forecast report, with projections for 2008 and 2009.
NAR expects sales of previously owned homes to slide from 5.65 million in 2007 to 5.38 million in 2008, and the association expects a 4 percent rise to 5.6 million in 2009. Sales of previously owned homes dropped 8.5 percent year-over-year in 2006 and fell 12.8 percent in 2007.
New single-family home sales are projected to drop 17.7 percent this year compared to 2007, and to rise 7.6 percent in 2009. New-home sales plummeted 18.1 percent in 2006 and 26.4 percent in 2007, the Realtor group reported.
The U.S. Census Bureau reported in January that sales of new single-family homes fell at the sharpest rate last year since 1963, and December 2007 new single-family home sales were 40.7 percent lower than the December 2006 estimate. And the new-home median price dropped 10.4 percent in December compared to December 2006.
Total housing starts, which fell 12.9 percent in 2006 and 24.8 percent in 2007, are forecast to fall 20.1 percent this year and another 1.3 percent in 2009.
The Realtor group expects the median existing-home price to fall 1.2 percent this year and to rise 3.2 percent in 2009, with the median new-home price falling 4.3 percent this year and rising 5 percent in 2009.
NAR forecasts that the median resale home price will drop to $216,300 this year, with the median new-home price dropping to $236,300.
The forecast calls for the 30-year fixed-rate mortgage to rise to the 5.9 percent in the fourth quarter and to average 5.7 percent for the full year this year and 6.3 percent in 2009.
U.S. gross domestic product is forecast to remain level at 2.2 percent this year compared to last, and to reach 2.7 percent in 2009. The unemployment rate is expected to grow from 4.6 percent in 2007 to 5.3 percent this year, dipping slightly to 5.2 percent in 2009.
NAR will release its next Pending Home Sales Index and forecast March 6, and will release its existing-home sales for January on Feb. 25. NAR’s report on fourth-quarter metro-area median existing-home prices is due out Feb. 14.
Listing prices were roughly flat in Phoenix and Dallas while rising 1.3 percent in New York. Listing prices declined most in San Francisco, falling 3.6 percent, followed by San Diego and Los Angeles at 2.3 percent, Detroit at 2.1 percent and Las Vegas at 1.9 percent.
During the past three months, the listing price has dropped 6.1 percent in San Francisco, 4.4 percent in San Diego, and 4 percent in Los Angeles and Detroit while gaining 2.5 percent in New York, the research companies reported.
Listing inventory, meanwhile, rose 5.8 percent in Miami in the past three months while dropping in all other studied market areas. Listing inventory fell 12.7 percent in Boston, 12.1 percent in Austin and 11.3 percent in San Francisco in the past three months.
Days on market rose 34.3 percent in Phoenix, 24.2 percent in Portland and 19.6 percent in Washington, D.C., during the past three months while dropping 38.9 percent in Denver and 16.6 percent in Dallas, Altos Research and Real IQ reported.