Housing slump not going away soon
The trade group is now looking for flat prices for existing homes in the first quarter of 2008, and a continued decline in new home prices in that period.
The group's previous monthly forecast had projected that both new and existing home prices would start to post a year-over-year rise in the first quarter of 2008.
Both new and existing home prices are now expected to show a less than 1 percent gain in the second quarter of next year, according to the latest forecasts. Those increases are less than previously forecast.
"Buyers now have an overwhelming advantage given the wide selection of homes available in many markets," said Lawrence Yun, NAR senior economist, in the group's forecast statement.
The group's forecast also shows some additional weakness in the projections for the rest of 2007 as well.
The group now sees second-quarter existing home sales falling below the 6 million annual sales pace to a 5.96 million rate. That is still only a forecast, as final sales and price figures from the just completed period are not yet available.
If it is correct, it would be the first time in four years that quarter sales were below the 6 million home annual sales pace.
A month ago the group was forecasting the pace of sales would end the quarter at a 6.03 million annual rate, and stay above that 6 million threshold through the rest of this year and into 2008. But the group now expects sales to stay just below the 6 million pace in the third quarter as well.
The group also now projects that the median existing home price for all of 2007 will be down 1.4 percent, which is slightly worse than its previous forecast of a 1.3 percent drop. The group has never seen a full-year decline in existing home prices in the nearly 40 years it has compiled national sales statistics.
It also is looking for a 2.6 percent drop in new home prices for all of 2007. That is also worse than the previous estimate of a 2.3 percent drop in prices. And while the forecast new home prices to show increases for all of 2008, the new estimate of a 2.2 percent increase from 2007 levels is less than the previous forecast of a 2.6 percent jump in prices.