Sales of US homes will ease modestly but should stay within a narrow range for the remainder of 2006, a real estate agents' trade group said on Tuesday.
The National Association of Realtors (NAR) said in a monthly forecast that it expects sales this year of existing homes to fall 6.7 percent to 6.6 million units, the third highest yearly level on record, from 7.08 million in 2005.
NAR also said it expects new home sales to fall 12.8 percent to 1.12 million units from 1.28 million in 2005, and for housing starts to dip 6.8 percent to 1.93 million units from 2.07 million last year.
"We should see home sales rise and fall month to month, but don't look for any big shifts one way or the other," National Association of Realtors chief economist David Lereah said in a statement.
"The major housing indicators have been moving up and down within a reasonable range, which means the market should even out just below present levels," he said. "At the same time, housing inventory levels are balanced in much of the country, so overall price appreciation will be at a normal rate."
NAR said it expects 30-year mortgage rates to reach 7.0 percent by the end of 2006. "We remain concerned about the potential impact of higher interest rates in some of the more expensive areas of the country," Lereah noted.
The Realtors group also forecast the national median existing home price for both single-family units and condominiums to rise 5.3 percent this year to $231,300 and for the median price on new homes to reach $243,300, up 1.0 percent from 2005.
But NAR President Thomas Stevens said home prices were levelling out. "Home sellers in most areas understand that the period of abnormal price growth is over, and they have become more realistic about the current market. This is helping to ease the pressure on home prices in some areas," he said.
The association also said it expects the 2006 US unemployment rate to average at 4.7 percent and the Consumer Price Index to be at 3.4 percent this year. US 2006 gross domestic product growth was forecast at 3.4 percent and disposable personal income to rise 3.1 percent.