The NAR's chief Econmoist, Mr. David Lereah, states that market conditions will vary from state to state.
Lereah also states that approximately ¾ of the U.S. will have a slow growth rate in the next year. He believes that the market has finished leveling out, and that gains across the board will be modest.
The New Year Presents Buyers with the Opportunity to Shop.
First time buyers will find a market that offers them sellers that offer more flexibility than in recent months along with falling interest rates that are predicted to go lower. These factors provide buyers with a unique opportunity. Conditions of this nature are expected to continue through the spring when inventory is expected to balance out.
2006 marks the third highest sales year on record of existing-home sales. Sales figures are projected to come in at 6.47million units. This marks a drop of 8.6% from the year 2005. In the coming year, sales are anticipated to reach a total of 6.47 units, which would come in at only 1% less than 2006.
Lereah states that by the 4th quarter of 2007, existing home sales will come in at 4.6% greater than the current quarter that we are in.
New-Home Construction Sees slow Down by Builders
Sales of new homes in 2006 are expected to see a decline of 17.7% to a total of 1.06 million units. This figure would mark the 4th highest total sales on record. In 2007, sales are predicted to fall an additional 9.4% to a total of 957,000 units.
Builders are having to cut back production to offset cost of existing inventory.
Additionally, rising construction costs are taking a larger bite out of profits.
Total housing starts for 2006 are likely to drop 12.3 percent to 1.82 million units, with another 15.1 percent decline in 2007 to 1.54 million.
Mortgage Interest Rates Seen Rising as High as 6.7%
The rate for a 30-year fixed mortgage is predicted to slowly increase to 6.7% through the 4th quarter of 2007. Just last week Freddie Mac stated that the rate for a 30-year fixed mortgage fell to 6.11%
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