David Lereah, NAR's chief economist, said that in each month of 2005 the forecast has been looking stronger than in previous projections. The housing expansion is continuing as more Americans take advantage of favorable conditions to achieve the dream of homeownership, he said. Earlier this year, we expected 2005 home sales to be the second-highest on record, but monthly sales have been at or close to record levels. Although we should come off of sales peaks in the months ahead, mortgage interest rates have remained lower than expected, and job gains are providing additional stimulus, meaning unprecedented sales totals this year.
The most notable problem in the housing market is the shortage of homes available for sale, as well as some shortages of building materials, Lereah said. These shortages are proving to be a challenge for home buyers, builders and remodelers, and are continuing to put pressure on home prices.
He expects the national median existing-home price for all housing types to rise 9.4 percent this year to $202,600, with the typical new-home price increasing 5.8 percent to $233,900.
NAR is a major assocaition which promotes the bubble mentality. David Lereah, NAR's chief economist is a major cheerleader for home price appreciation. He will be proven wrong just like Jim Cramer during the dot com bubble.