Home prices extended their decline in the first three months of the year, but the nation’s housing market seems to be stabilizing and is likely to recover slowly in the second half of 2007, the National Association of Realtors said last week.
The median price of an existing single-family home was $212,300 in the first quarter, down 1.8 percent from the January-March period a year ago. It was the third quarter in a row in which prices fell. But the drop wasn’t as severe as the one in the fourth quarter of 2006, when the median price fell 2.7 percent. (Median means half are higher and half are lower.)
“It appears the worst of the price correction is behind us,” said Pat Combs, the NAR’s president.
Though the first quarter was better than the end of 2006, the NAR said last month it was surprised by a sudden weakening in March.
Sales from February to March plunged 8.4 percent, the sharpest month-to-month fall in 18 years, causing the NAR to conclude that the correction had hit a new low.
Lawrence Yun, the NAR’s senior economist, says he’s waiting to see how stricter lending rules, especially for those with weak, or subprime, credit, will hit the market. “We know it’s going to make home buying softer, but how much?”
A lot, home builders say. An index of builder confidence fell this month to the lowest level since September, the National Association of Home Builders said.
“We’re now projecting that home sales and housing production will not begin improving until late this year, and we’re expecting the early stages of the subsequent recovery to be quite sluggish,” David Seiders, the NAHB’s chief economist, said in a statement.
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Some Gains
Still, existing-home prices rose in 82 metro areas in the first quarter, better than in the final three months of last year, when 71 areas saw rising prices. Prices fell in 62 areas. The strongest gain was in the Cumberland area of Maryland and West Virginia, where the median price jumped 17 percent to $100,000.
The next-biggest price gains were posted by the Beaumont-Port Arthur area of Texas, up 16.5 percent, and by Gulfport-Biloxi, Miss., where the median price surged 15.7 percent.
The nation’s least-expensive area remains Elmira, N.Y., which also suffered the steepest price drop in the quarter, down nearly 15 percent to $75,300.
