Forecasts of 1.9% drop in U.S. resale home price

Sales of resale homes may fall 12.5% in 2007

The subprime problem in US is not only creating problem of foreclosure, but it is also creating problems for the pre owned home sale business. The lack of credit for buying home is also playing its part in the game.

The National Association of Realtors reported that sales of resale homes have come down to 5 million annualized pace. Whereas during the first half of the year the number of resale homes was 6.17 million.

Experts expect that the resale home prices will fall 1.9 percent this year. In the previous two years it gained a good percentage.

Expectation of price drop
New single-family home sales  

25 percent in 2007    and another 12.1 percent in 2008

Housing starts                             

24.6 percent in 2007 and another 14.9 percent in 2008

New-home prices                       

3 percent in 2007 and another 0.2 percent in 2008

It has been anticipated that the resale homes sales will be down 12.5 percent to 5.67 million in 2007.

Also the subprime share of loans reduced to less than 1 percent this year. The same share was 20 percent in the first half of the same year. Now as in the face of the problem faced by the real estate industry, the Federal Housing Administration loans will occupy  more of the pie. It is expected to rise to 10 percent by 2009, wheras current share is 4 percent.
The scenario is not look good at present, but everyone has a hope that things will improve in future.