Thursday, January 11, 2007

Lereah on the 2007 Housing Market

The NAR released this information about the housing market in 2007. "David Lereah, NAR’s chief economist, said annual totals for existing-home sales will be fairly comparable between 2006 and 2007." He said:
“We have to keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation,” he said. “We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it’ll be pretty much of a wash in terms of annual totals. The good news is that the steady improvement in sales will support price appreciation moving forward.”
These economic predictions were released by the NAR, Mr. Lereah is their chief economist so he is responsible for these numbers:

Existing-home sales for 2006 are expected to come in at 6.50 million, the third highest on record, with a total of 6.42 million seen in 2007. New-home sales in 2006 should tally 1.06 million, the fourth highest on record, with 957,000 projected this year.

Total housing starts for 2006 are likely to be 1.81 million units, with 1.51 million forecast in 2007, which would be the lowest level in a decade. Builders are pulling back on new construction to support prices of remaining inventory.

The 30-year fixed-rate mortgage will probably rise to 6.7 percent by the fourth quarter of 2007. Last week, Freddie Mac reported the 30-year fixed rate at 6.18 percent – far below earlier consensus forecasts. “The current interest rate environment and housing inventory levels present a window of opportunity for potential buyers,” Lereah said.

The national median existing-home price for all of 2006 is expected to rise 1.1 percent to $222,100, and then gain 1.5 percent this year to $225,300. The median new-home price, after rising only 0.3 percent to $241,600 in 2006, is projected to grow 3.0 percent in 2007 to $248,900.

These predictions are too optomistic and reflects the cheerleading by the segments of the housing industrial complex.


At 8:29 AM, Blogger Dr Housing Bubble said...

A wash? David Lereah should have co-starred in the Illusionist because I have no idea what he is seeing or how he is making those numbers work.

From the numbers I have been seeing based in reality, prices are declining and inventory is rising. This is according to DQnews, MLS data, and field reports. But what do we know right?

I have a couple of case posts on my blog showing how absurd prices are.

Dr. Housing Bubble

At 3:01 PM, Blogger Revin F Floyd said...

My Mom is a collector and has been working for New Century for about three years, with twenty-five years in the industry as a collector.

Interestingly enough, the day after anoucing 2000 people would be let go the next day (people with nothing left to do bu watch the clock) The Collection department manager anounced that a new "incentive program" was going to be put in place to reward "top performers." In this scheme, collection calls will by monitored calls and a supervisor will log customer promises to pay. Then, as payments are received, they will match actual payments received to the "promise logs" for each collector. The five collectors with the highest ratio of promises to payments received, will receive a half-day paid time off.

Also, right after the layoff confrence call was complete (and all the whimpering and crying by CEO Morice about how he was so sorry about "any possible hardships" the company "may" have caused its employees, an "Ice Cream Social" was annouced for next week! To celebrate?

Hip Hip Hurray! Ice Cream! Ice Cream, We All Scream for Ice Cream!!!

Straight out of a Dilbert cartoon...


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