Sales of resale homes are expected to remain roughly flat this year, with the median resale home price falling for the third straight year, according to the latest National Association of Realtors forecast.
The Realtor group expects annual sales of resale homes to rise 0.3 percent this year, to 4.93 million, and to rise 5.8 percent in 2010.
The median price, meanwhile, is expected to fall 4.9 percent this year to $188,800, and NAR expects the median price to rise 3.9 percent in 2010, to $196,200.
Sales of new single-family homes are expected to sink 39.6 percent this year, following a 37.8 percent decline last year and a 26.3 percent drop in 2006. NAR projects 291,000 sales of new single-family homes this year, down from 775,000 in 2007 and 482,000 in 2008.
And the median price of new single-family homes is expected to drop 3 percent this year, to $223,600, and to rise 4.2 percent in 2010, to $233,000.
The NAR forecast anticipates that real gross domestic product will sink 2.5 percent this year and climb 1.7 percent in 2010, and that unemployment will soar to 8.7 percent this year and 9.2 percent in 2010 — from 4.6 percent in 2007 and 5.8 percent in 2008.
The interest rate for a 30-year fixed-rate mortgage is expected to average 5.2 percent this year, and to rise to 5.6 percent in 2010.
A NAR index that tracks housing affordability rose to a record level in January, and the group reported that the combination of mortgage rates, family income and home prices in January were "the most favorable since tracking began in 1970."
The index suggests that a median-income family earning $59,800 could afford a $283,400 home in January with a 20 percent down payment, assuming 25 percent of gross income is devoted to paying the mortgage principal and interest.
NAR also reported that a monthly index that tracks pending sales of resale homes dropped 7.7 percent in January compared to December 2008 and fell 6.4 percent year-over-year.
The Pending Home Sales Index, which is based on monthly sales contracts signed, rose 13.5 percent in the West while dropping 19.7 percent in the Northeast, 13.8 percent in the Midwest and 9.1 percent in the South year-over-year in January, NAR reported.
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