Chicago Real Estate Blog

NAR Predicts a Housing Market Rebound in Late 2008

The chief economist for the National Association of Realtors says the U.S. is moving towards an improvement in home sales this year however we shouldn’t expect to see any changes for another few months. The NAR forecasts a stabilization of existing home sales during the first two quarters of 2008, followed by an upturn in the latter half of the year.

The NAR attributes the anticipated increase in sales activity to changes in mortgage accessibility and the impact of the government’s economic stimulus finally catching up. It’s expected that "higher mortgage loan limits" will prompt more interest in upmarket properties, plus borrowers should experience "wider access to affordable credit," according to NAR Chief Economist Lawrence Yun who also says the days of dramatic dips in home sales seem to be past us.

NAR analysts predict the annual existing home sales rate for 2008 will shoot up from 4.9 million in the 1st quarter to 5.9 million in the 4th. The sales pace in 2009 is projected to rise even more, surpassing the previous year’s existing home sales by 6.6 percent. New construction homes are not expected to respond as well as existing properties however. Nationwide sales may drop by as much as 25 percent this year and housing starts are likely to see a 26 percent decrease in 2008.

Because the success of the real estate industry is notably dependent on how the economy is faring, NAR experts conclude interest rate adjustments and other policies instated by the federal government will help the housing market recovery in the second half of 2008 and into 2009. Disposable income is estimated to climb 1.2 percent this year, which will give Americans more money to spend on consumer products (including homes).

Only time will tell what the next 6 to 8 months holds for the residential real estate scene. It’s important to remember each area is unique and every region will respond differently to the various factors at work. But overall, it looks like there’s an optimistic future for existing home sales nationwide, which is a stepping stone to full recuperation of residential real estate sales across the board.   

Posted at 05:00PM Apr 14, 2008 by Spencer Mason in General  |  Comments[0]