Most U.S. Housing Markets to Experience Sluggish Expansion in 2007

A gradual increase in existing home sales is expected throughout 75 percent of the country in 2007, while the remaining areas will continue to see a slowdown during the first part of the year, according to NAR's year-end forecast.

National existing home sales are anticipated to reach 6.40 million in 2007, down 1 percent from this year's expected 6.47 million. With rising construction costs and lower levels of builder activity, the Association projects a larger decline in new home sales, which are forecasted to fall 9.4 percent to 957,000 next year.

Median home prices for both existing and new homes are expected to register slight increases in the coming year, forecasted at $224,700 and $241,700, respectively."

Buyers, especially first-time buyers, with the combined benefits of seller flexibility and an unexpected drop in mortgage interest rates, have a window of opportunity," said NAR Chief Economist David Lereah. "These conditions will persist in many areas until early spring when inventory supplies are likely to become more balanced."

**Taken from the California Association of Realtors Bulletin, dated December 13, 2006.