National Market Predictions

How to sum up the latest National Association of Realtors predictions? Things are calming down with adjectives like "modest," "moderate" and "slight" peppering the latest forecast of things to come. Following times of wild ups and downs people sometimes get conditioned to look for superlatives like ROCK BOTTOM and LOWEST EVER or on the selling side ALL TIME HIGHS screaming from the headlines, but remember in all investing and especially in real estate slow and steady wins the race! Don't be misled by quieter times, here and now more than ever reasonable real estate is always a good investment!

"Modest near-term movement is expected in existing-home sales, with a recovery in sales seen during the second half of the year, according to the latest forecast by NAR.

Based on current indicators, the 30-year fixed-rate mortgage is forecast to rise gradually to 6.5 percent by the end of this year, and then hold at that level for most of 2009. NAR’s housing affordability index is improving this year and is likely to rise 15 percentage points to 127.0 for all of 2008.

Existing-home sales are expected to grow from an annual pace of 5.01 million in the second quarter to 5.75 million in the fourth quarter. For all of 2008, existing-home sales should total 5.31 million, and then increase 5.0 percent next year to 5.58 million.

The median new-home price is expected to decline 3.2 percent to $239,300 this year, and then rise 5.3 percent in 2009 to $251,900. Growth in the U.S. gross domestic product (GDP) is seen at 1.6 percent in 2008 and 1.4 percent next year. The unemployment rate should average 5.4 percent this year and 5.8 percent in 2009. Inflation, as measured by the Consumer Price Index, is forecast at 3.7 percent this year and 2.4 percent in 2009. Inflation-adjusted disposable personal income is projected to grow 1.5 percent in both 2008 and 2009."

For the full Realtor magazine report: http://www.realtor.org/RMODaily.nsf/pages/News2008070801?OpenDocument