GO
Loading...

Realtor Group Cuts 2007 Forecasts; Existing Home Prices to Fall

Reuters
Wednesday, 11 Apr 2007 | 12:11 PM ET

The national median existing-home price is expected to slip 0.7% to $220,300 this year, the National Association of Realtors said. A decline would be the first since the NAR started tracking home prices in the late 1960s.

Tougher lending standards that will follow the current subprime mortgage crisis will slow the U.S. housing market's recovery, the trade group said.

"Higher loan standards will slow the housing recovery," the NAR said.

Subprime borrowers with damaged credit have recorded higher delinquencies and foreclosures in recent months. As a result, investors have drained the subprime market of capital while regulators and lawmakers mull tougher lending standards.

That contraction ultimately will help the housing market, the trade association said.

"Tighter lending criteria and fallout from the subprime loan debacle will lead to a healthier housing market with greater assurances that owners can handle mortgage adjustments," the group said in its statement.

The median new-home price should increase 0.4% to $246,200 this year after gaining 1.8% in 2006.

The NAR lowered its home sale outlook for the year. Existing home sales are likely to total 6.34 million in 2007, the group said today. Last month, the group said it saw sales of previously owned homes hitting 6.42 million.

New homes sales should hit 904,000 this year, the group said Wednesday. Last month, it said new homes sales should hit 950,000 for the year.

Featured

Contact U.S. News

  • CNBC NEWSLETTERS

    Get the best of CNBC in your inbox

    › Learn More

Don't Miss

U.S. Video

  • Bitcoin. Digital gold rush or a shadowy tool empowering criminals on the dark web? What is really driving The Bitcoin Uprising? CNBC's Mary Thompson takes an in-depth look at this emerging digital currency by speaking to the bitcoin faithful, who believe the open source currency will upend the global financial system, as well as those who believe bitcoin is an easily manipulated tool that empowers criminals, hackers and drug barons in the dark online underworld. Although the future of bitcoin is uncertain, The Bitcoin Uprising sheds much needed light on the speculative currency and the future of money.

  • Loyalists around the world have embraced it as the cryptocurrency of the future, but some big names on the street differ widely in their beliefs about bitcoin. The Oracle of Omaha thinks it's a "joke." Tech entrepreneur Marc Andreessen counters that Buffett is out of touch, while bitcoin believers like Jonathan Rumion fully embrace the digital currency by buying groceries with bitcoin and even getting paid in bitcoin. CNBC's Mary Thompson reports.

  • Authorities say the online black-market bazaar Silk Road could be the tip of the iceberg when it comes to the criminal underworld using bitcoin for trading in illicit goods and services. On the "Dark Web," fake IDs, drugs, even hit men are all paid in bitcoin. CNBC's Mary Thompson explores why bitcoin is the currency of choice for criminal activity on the dark web and reports on the story of Mt. Gox, the largest bitcoin exchange, which shut down in February, leaving bitcoin investors holding the bag.