Home Prices to Recover in 2008
The latest economic forecast by the NATIONAL ASSOCIATION OF REALTORS® shows home prices recovering in 2008 as housing inventory falls from current levels.
Buyers now have an overwhelming advantage given the wide selection of homes available in many markets," says Lawrence Yun, NAR senior economist.
"But with profit margins coming under pressure, homebuilders will limit new construction well into 2008. This should help the overall inventory level to move steadily into a more balanced state."
NAR says existing-home sales will begin picking up with an expected 6.37 million for 2008, compared with 6.11 million for 2007. Those numbers are both lower than 2006 that had 6.48 million.
Meanwhile, new-home sales are projected to reach 865,000 in 2007 and rise to 878,000 next year, compared with 1.05 million in 2006. Housing starts, including multifamily units, are forecast at 1.43 million units this year and 1.44 million in 2008, down from 1.8 million last year.
Prices Expected to Rise for New & Existing Homes
Markets that sharply reduced new construction in 2007 will generally experience respectable price increases in 2008.
Local conditions vary considerably, but with historically low mortgage interest rates and sustained job gains, it is a good time for first-time buyers with a long-term view to test the housing waters.
Other Predictions:
The 30-year fixed-rate mortgage is estimated to fluctuate around 6.6 percent in 2008.
Growth in the U.S. gross domestic product (GDP) will probably be 2 percent in 2007, compared with a 3.3 percent growth rate last year; GDP is forecast to grow 2.8 percent this year.
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