The NAR makes predications for future homes sales, foreclosures

The amount of US homes selling this year will decrease further than previously expected, however, home prices will not fall as far as earlier expected. The National Association of Realtors have been scaling back their sales forecast since March, but pared back its predictions of a significant drop in the existing home prices. About 6.04 million existing homes are expected to sell this year, which is lower than the NAR expected last month, predicting that 6.11 million homes would sell this year. Both of these figures are above the 5.75 million sold homes prediction that the NAR made in June, and a chief economist with the NAR predicts a slight upturn for home sales for the end of 2007. Prospective borrowers looking to buy homes have faced tight restrictions in trying to secure a loan after thousands of borrowers with subprime loans and ARM’s were forced into foreclosure this year. Many lenders have stopped offering the previously popular loans to try to prevent record numbers of homeowners from facing foreclosure. The NAR states that while the housing market is currently facing hard times, it will recover, especially considering the growing US population and economy. The organization is also predicting that the median US home price should fall slightly this year to $219,300 for existing homes and $240,800 for new homes. In related reports, the rate of mortgage applications rose significantly this week as interest rates fell and the availability of homes rose. The number of foreclosures on the market is also affecting home buyers as they are able to get the foreclosures far below market value.