Realtors association says home sales are `close to a peak'

REAL ESTATE WATCH

August 14, 2005|By Bloomberg News

Home sales are "close to a peak" in the United States, and prices will rise next year at about half the rate of 2005, the National Association of Realtors said last week.

The median price of an existing home will increase 5.2 percent to $215,200 next year, the smallest gain since 2000, when prices rose 4.1 percent, according to a forecast by the Washington-based trade group. Sales of previously owned homes will fall 3.6 percent and sales of new homes will drop 4.5 percent.

"The housing market is probably close to a peak right now," David Lereah, the group's chief economist, said in a statement.

This year, a shortage of homes for sale and mortgage rates that tumbled in June are fueling the biggest price increases in a quarter of a century, the association said. The median home price will gain 11 percent to $204,600 in 2005, the Realtors forecast. That would be the biggest jump since 1980, when prices increased 12 percent.

- Bloomberg News

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