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KB Home reports a wider than expected loss. Countrywide denies bankruptcy rumors. The head of Fannie Mae says in a speech that he thinks the housing market would “perhaps begin to gain modestly” by 2010.
Yet the Realtors keep putting the best possible face on the bad news. Today their trade association reports that even though its own Pending Sales Index, which tracks home purchase contracts signed in November, fell 2.6%, there are signs the market may have bottomed out.
Says Lawrence Yun, chief economist for the national association: “A meaningful recovery in existing-home sales could occur as early as this spring.”
The association has been lobbying Washington for a sharp cut in interest rates and a big increase in what qualifies as a conventional mortgage, to $625,000 from $417,000.
Elsewhere the association predicts existing-home sales for 2007 will total 5.66 million, the fifth highest on record, then edge up to 5.70 million this year and 5.91 million in 2009, compared with 6.48 million in 2006. Existing-home prices for 2007 are likely to be down 1.9 percent to a median of $217,600, hold even this year and then rise 3.1 percent in 2009 to $224,400.
New-home sales are projected at 773,000 for 2007, and declining to 669,000 this year before rising to 730,000 in 2009, but well below the 1.05 million 2006. Multifamily units are forecast at 1.36 million for 2007 and 1.09 million this year before edging up to 1.10 million in 2009. The median new-home price should drop 2.1 percent to $241,400 for 2007, and then rise 0.4 percent to $242,200 this year and gain another 5.9 percent in 2009.
BusinessWeek editors Chris Palmeri, Prashant Gopal and Peter Coy chronicle the highs and lows of the housing and mortgage markets on their Hot Property blog. In print and online, the Hot Property team first wrote about the potential downside of lenders pushing riskier, "option ARM" mortgages and the rise in mortgage fraud back in 2005—well ahead of many other media outlets. In 2008, Hot Property bloggers finished #1 in a ranking of the world's top 100 "most powerful property people" by the British real estate website Global edge. Hot Property was named among the 25 most influential real estate blogs of 2007 by Inman News.