May Pending Home Sales Fall, NAR Adjusts Forecast

Bill — Wed, 09 Jul 2008 20:46:20 +0000

NAR’s latest Pending Home Sales Index, which is based on contracts signed in May, fell 4.7 percent from April and was 14.0 percent below its May 2007 level, the association announced this morning. The May index fell month-over-month in all regions: by 1.3 percent in the West, 2.9 percent in the Northeast, 6 percent in the Midwest and 7.1 percent in the South. Year-over-year, the West posted a 2.0 percent increase from last May, but the Northeast, Midwest and South dropped by 16.4 percent, 13.8 percent and 22.1 percent, respectively.

In its latest forecast, which was also released this morning, NAR projects that existing-home sales will fall 6.1 percent in 2008 to 5.31 million, then rise 5.0 percent to 5.58 million in 2009. The median existing-home price is expected to fall 6.2 percent this year to $205,300, then rebound by 4.3 percent in 2009 to $214,000.

NAR currently projects new-home sales will decline 32.3 percent in 2008 to 525,000, then fall another 3.4 percent to 507,000 in 2009. The median new-home price is expected to decline 3.2 percent to $239,300 this year before rising 5.3 percent in 2009 to $251,900.

NAR chief economist Lawrence Yun says the performance of local housing markets varies greatly. “Some markets have seen a doubling in home sales from a year ago, while others are seeing contract signings cut in half. Price conditions vary tremendously, even within a locality, depending upon a neighborhood’s exposure to subprime loans.”

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May Pending Home Sales Fall, NAR Adjusts Forecast