| 12/11/2006 1:34:15 PM |
| Ridgeland, MS, DEC 11, 2006 (EventX/Knobias.com via COMTEX) -- The National Association of Retailers (NAR) projects existing home sales in Q4 of 2007 will show a 4.6% increase over the current quarter. Due to a soft first half however, full year sales are expected to slip modestly to 6.40M in 2007 from 6.47M in 2006. The median price of existing homes is projected to increase by 1% to $224,700 next year from $222,600 this year. Also today, Treasury Secretary Paulson said the housing industry was growing at an rate over the last several years that had not been sustainable. It is now "in the process of transitioning to a more sustainable growth rate." The picture is darker for new home sales. The NAR expects new home sales to fall 9.4% to 957,000 next year after declining 17.7% to 1.06 million this year. The NAR also suggested high construction costs will "minimize potential profits."Other factors that will weigh on homebuliders include a projected increase in the 30-yr mortgage rate to 6.7% from 6.11%. Unemployment 4.8% vs. 4.6% and CPI inflation 3.4% vs. 2.3% are expected to rise in 2007. GDP is expected to decline to 2.3% from an estimated 3.3% this year. KB Homes (KBH -0.1%) warned it will take between $235 million and $285 million of noncash charges to write down the value of its land investments. The SPDR Homebuilders ETF (XHB) is up 0.6% today after two days of sharp declines. |
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