The National Association of Realtors lowered its annual housing market forecast again, but remains optimistic. In 2007, it now estimates 6.11 million existing homes will sell, down from June's 6.18 million forecast, and the lowest since 2002's 5.63 million. The median sales price for existing homes will shrink 1.4% to $218,800, down from June's -1.3% prediction, but should rise 1.8% in 2008 with sales rising 4% to 6.37 million. Some 865,000 new single-family home sales are expected this year, down from 1.05 million in 2006. Median 2008 new-home prices will rise 2.2% to $245,400 after a 2.6% drop in 2007 to $240,100. The NAR expects 1.43 million housing starts, including multifamily units, in 2007, and about the same in 2008. There were 1.80 million in 2006. The NY Times says housing figures are skewed because the high-end housing market remains robust while the lower-end tanks. NAR chief economist Lawrence Yun says cities that cut production and inventory will rebound faster, but that the decline in building could still trim another 1% from the home supplies/construction market to $495 billion, a 5-year low. The Fed remains upbeat on contained housing fallout, and bulls are encouraged by an uptick in mortgage applications. Homebuilders, however, continue to report losses, and British regulators have started clamping down on UK subprime lenders.
Sources: NAR Press Release, Reuters I, II, Bloomberg, Curbed SF, NY Times, Twin Cities, Forbes
Commentary: Market Distribution Following Profit Warnings in Housing and Retail • A Key Concept In Marginal Effects • Is This the Bottom for Submerging Prime?
Stocks/ETFs to watch: K. Hovnanian Enterprises (NYSE:HOV), Beazer Homes (NYSE:BZH), K.B. Homes (NYSE:KBH), Toll Brothers (NYSE:TOL), Centex Corp. (CTX), Ryland Homes (NYSE:RYL), Pulte Homes, (NYSE:PHM), Lennar Corp., (NYSE:LEN), MDC Holdings (NYSE:MDC), NVR Inc. (NYSE:NVR), D.R. Horton (NYSE:DHI), iShares Dow Jones U.S. Home Construction (NYSEARCA:ITB), PowerShares Dynamic Building & Construction (NYSEARCA:PKB), SPDR Homebuilders (NYSEARCA:XHB)
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