Filed under: Bad news, Industry, Economic data, Housing, Federal Reserve
According to the The National Association of Realtors the current housing slump is only going to get worse. The NAR came out and lowered their forecast for home sales today, the ninth time this year it has done so.
The group stated today that it is now expecting to see a 8.6 percent drop in existing home sales. Its previous estimate, made last month, was that 2007 would witness a 6.8 percent decline. It is also predicting that the decline is not going to end anytime soon, and that we should expect to see further decay in the housing market into 2008.
New home sales are also going through rough times this year, and the NAR is predicting that 2007 will end with a 24 percent decline in sales. This follows a tough 2006 which saw new home sales fall off by 18 percent. It is now expecting that new home sales are not going to hit bottom until sometime in the first quarter of next year, not the end of this year as it had previously estimated.
The forecast that prices will start to climb again next year is not being universally accepted by industry analysts. Alex Barron, an analyst with Agency Trading Group Inc. thinks the group is being a bit optimistic in its 2008 forecast. Mr. Barron has stated that “you have to wonder what the NAR is thinking,” and that “we’re going to see a drop in volume and prices.”
Let’s hope that the NAR is right, and there is a turnaround coming in the not too distant future for the struggling housing market.
[Thanks to D’Arcy Norman for the photo]
Michael Fowlkes has worked as a stock trader for seven years and spent the last two years working as an analyst for the online investment advisory service Investor’s Observer.
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