07 May 2008 20:16 [Source: ICIS news]
The realtors group also said it expects new home construction will be down by nearly 30% this year before beginning a slow recovery in 2009.
“As anticipated, we continue to look for a soft first half of the year for both housing and the economy before notable improvements in the second half,” said NAR chief economist Lawrence Yun.
Yun said sales of existing homes likely will remain flat for the next couple of months and then show improvement toward the third quarter.
However, even that forecast of modest improvement in the key housing sector is dependent on a still uncertain financial future, Yun and other NAR officials said.
“The extent of an expected recovery hinges on better access to affordable loans,” Yun said.
NAR president Richard Gaylord said that while real estate agents and home builders are seeing more people shopping for homes, sales remain flat.
“In many cases buyers are waiting for greater access to affordable credit, especially in higher cost areas,” Gaylord said, “but some are disappointed with what appears to be unnecessarily restrictive lending requirements.”
In the wake of last year’s collapse in the subprime mortgage market and its ripple effect through the broader financial markets, US home mortgage lenders have become increasingly wary of making loans to prospective home buyers.
Many lenders are demanding higher down-payments, and despite continuing reductions in basic interest rates by the Federal Reserve Board - the
NAR said it expects the average
Even though new home sale prices are expected to fall nearly 4% this year, higher mortgage interest rates and down-payment requirements may keep buyers out of the market, the association said.
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