The latest economic forecast by NATIONAL ASSOCIATION OF REALTORS®:
- Homebuilders will limit new construction well into 2008. The forecast predicted that home prices are poised for recovering in 2008 as housing inventory falls from current levels.
- The 30-year fixed-rate mortgage is estimated to average 6.7 percent during the second half of this year, and fluctuate around 6.6 percent in 2008.
- Growth in the U.S. gross domestic product (GDP) will probably be 2 percent in 2007, compared with a 3.3 percent growth rate last year; GDP is forecast to grow 2.8 percent in 2008.
- The unemployment rate is likely to average 4.6 percent in 2007, unchanged from last year.
- Inflation, as measured by the Consumer Price Index, is projected at 2.6 percent in 2007, down from 3.2 percent last year. Inflation-adjusted disposable personal income should rise 3 percent this year, up from a 2.6 percent gain in 2006.—
- REALTOR® Magazine Online
Sales of High-End Homes Are Booming
From an article by David Leonhardt (07/11/07) on The New York Times
Sales of high-end homes are doing better than the rest of the market in many areas, according to DataQuick Information Systems, which tracks home prices.
In Boston, for instance, the number of homes selling for at least $1 million fell to 619 in the first five months of 2006, but jumped to 711 in the first five months of this year, about equal to sales during the same period of 2005, which was a boom year.
The same situation is true for New York City; San Jose, Calif.; Seattle; Denver; and Houston. Meanwhile, in San Francisco, Los Angeles, Phoenix, and Miami, high-end sales are down but not by nearly as much as sales in other price segments.
There appears to be three main causes of the split in the market. First, affluent families continue to do better financially than others, thanks to healthy income gains and a rising stock market.
The upper end of the market has also been helped by an influx of well-off foreign investors whose buying power has grown with the recent decline of the dollar.
Finally, both the recent rise in interest rates and the problems in the mortgage market have had a much bigger effect on low-income and middle-class buyers than affluent ones. It's become harder to get a subprime mortgage, while the uptick in interest rates this year has added about $100 to the monthly payment on an average 30-year fixed-rate mortgage.
Source: The New York Times, David Leonhardt (07/11/07)