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No Signs Of Housing Recovery

The National Association of Realtors released their latest housing numbers this morning. More bad news. Home prices are likely to decline in 2008 for the second straight year. According to CNN Money, the Realtors, in their monthly economic and sales outlook, are forecasting a 1.2% decline in the prices of existing homes sold in 2008. Only a month ago they were still forecasting that prices would be flat this year and housing would rebound in the second half of 2008. Last year was the first on record that the NAR recorded a full-year decline in existing home prices, as the median price fell 1.4% from 2006.

Regarding existing home sales, the Realtors are predicting a 4.8% drop in the number of houses sold in 2008. Last month they were still forecasting a 0.9% pickup in sales. The NAR predicts 5.38 million units will be sold in 2008, down from their January estimate of 5.7 million. Existing home sales plunged 12.8% in 2007, according to the trade group’s data.

The NAR sees even greater weakness in new home sales for 2008, with median prices declining 4.3% and the number of sales falling 17.7% from 774,00 units to 637,000 in 2008.

In addition, the National Association of Realtors’ index of signed purchase agreements decreased 1.5% to 85.9. the group said today. The measure was down 24.2% from this time last year. The pending home sales index is more forward looking than the Realtors’ more widely-followed reading on existing home sales, which tracks closings.

According to Reuters, NAR chief economist Lawrence Yun predicted home sales activity will remain soft through the first half of the year despite a generational low in mortgage interest rates.

Before the release of today’s numbers, Scott Anderson, senior economist at Wells Fargo & Co. in Minneapolis, told Bloomberg:

The housing outlook has deteriorated significantly and I don’t see a bottom on sales and starts until the middle of the year at the earliest. And our outlook on home prices has gotten worse.