Existing Home Sales Expected to Decline 10.8%

Existing Home Sales Expected to Decline 10.8%

This year's decline in existing home sales will be steeper than previously anticipated. The eighth straight downwardly revised forecast from the National Association of Realtors calls for U.S. existing home sales to be 10.8 percent below last year as housing market woes persist. Sales of new homes, meanwhile, are expected to finish 2007 at the lowest level in a decade.

The trade group's outlook for 2007 homes sales has grown more pessimistic through the year as foreclosures soared, credit market troubles developed and sales fell. Back in February, the group forecast an annual decline in existing home sales of only 0.6 percent.

Despite the bleaker outlook, the group maintains an optimistic message. NAR senior economist, Lawrence Yun, noted in a statement…"The speculative excesses have been removed from the market and home sales are returning to fundamentally healthy levels, while prices remain near record highs, reflecting favorable mortgage rates and positive job gains."

The median U.S. existing home price edged up slightly in August to $224,500, an increase of 0.2 percent from August 2006. It marked the first year-over-year price increase after a record 12 straight months of declining prices.