Houston's Rate Sheet

NAR economists sticking with a slow down.

In a press release issued by the National Association of Realtors continued to predict a slow down for 2006. NAR's cheif economist again predicted a slow down in the home sales. According to David Lereah, home sales will stay historically strong, but under the 2004 or 2005 levels.

David Lereah, NAR’s chief economist, said the sales slowdown has already occurred. “Right now, home sales are a little lower than projected, but they can be sustained around current levels,” Lereah said. "Sometimes people lose sight of the fact that real estate is cyclical. Even so, sales will continue at a historically high pace with modestly higher interest rates as the year progresses, and 2006 is forecast to be the third strongest year on record.”

Existing-home sales are likely to decline 4.7 percent to 6.74 million this year, down from a record 7.07 million units in 2005, while new-home sales are expected to fall 8.5 percent to 1.17 million from a record 1.28 million in 2005; both sectors would see their third best year after the totals for 2005 and 2004. Housing starts are seen at 1.87 million units in 2006, down 9.3 percent from 2.06 million last year.

Mr. Lereah belives the 30-year fixed rate mortgage will rise to 6.9 percent at the close of 2006. As we talked about a couple of weeks ago, NAR economists are rarely correct in their beginning of the year predictions. I do hope they're right about this one. I would be more than happy with the 3rd best Real Estate economy in US history.

posted by Vincent Biondillo @ 11:21 AM