REALTOR Association Predicts a Strong, Balanced Market in 2006

The National Association of Realtors® released their forecast for 2006, and market conditions appear to be very good for housing next year. The NAR predicts 2006 will end as the second best year in history for home sales, ranking just behind 2005.

In general, their research shows slower growth in home sales, sales prices, new construction, but they describe the economic effect to be more like ‘brake tapping’ coming down from a mountain peak as opposed to ‘bubble bursting’. The transition should result in a more normal and balanced market.

Their predictions:

• After 5 years of annual sales activity records, 2006 will finish as the second best historically.
• Interest rates on 30-year fixed mortgages will slowly climb to a high of 6.6% in the second half of 2006.
• Existing home sales and new home construction will slow, but just behind the record pace of 2005.
• National median home prices will see appreciation at more modest 6.1% in 2006 than the record pace of 12.7% in 2005.
• Higher construction costs will raise the new home median cost from 5.5% in 2005 to 7.3% in 2006.

Here’s the full text of the release, which contains other economic data to support their forecast.

If you're new here, you may want to subscribe to my RSS feed. Thanks for visiting!

Add comment December 13th, 2005