Jones Lang LaSalle


Home Sales Are Expected to Drop
As Mortgage Rates, Prices Climb

DOW JONES NEWSWIRES
March 14, 2006; Page D7

WASHINGTON -- A housing-industry group expects sales of existing homes to drop 5.7% this year as mortgage rates and home prices climb.

The National Association of Realtors said it expects sales to decrease to 6.67 million from a record 7.08 million in 2005.

New-home sales are expected to decline 7.7% to 1.18 million from a record 1.28 million in 2005.
The group said the national median existing-home price for all housing types is projected to rise 5.8% in 2006 to $220,300. The median new-home price should increase 5.4% this year to $250,200, it said.

"The cooling from overheated sales conditions in recent months is helping to bring inventory levels up to the point where buyers have more choices than they've seen in the last five years," said David Lereah, chief economist at the NAR.

"Annual price appreciation is still running at double-digit rates, but the cause of those sharp increases is going away," Mr. Lereah said. "As the market readjusts, price appreciation should return to more normal rates of growth this year."

The NAR said the 30-year fixed-rate mortgage should increase gradually to 6.9% in the fourth quarter.

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