Home prices are expected to grow modestly next year and sales will keep rising as the housing market continues to recover from the worst downturn since the Great Depression, the National Association of Realtors said yesterday.
Home resales are projected to total 5.7 million next year, up from an estimated 5 million this year. Prices will climb about 4 percent after a projected decline of 13 percent this year, according to Lawrence Yun, chief economist for the trade association.
“Going into 2010, I anticipate that prices will also begin stabilizing or begin to modestly improve,’’ Yun told the audience at the association’s annual conference and expo in San Diego.
That should help ease buyers’ anxiety. “I don’t think the fear factor will be at play in 2010,’’ Yun said.
The housing market’s rebound has been aided by an aggressive federal intervention to lower mortgage rates and bring more buyers into the market. Home resales rose in September to the highest level in more than two years, something Yun said shows buyers are eager to get back into the market.
A federal tax credit of up to $8,000 for first-time home buyers has helped stoke sales this year. First-time buyers accounted for a record 47 percent of home sales this year, up from 41 percent last year, the trade group said.
Yun estimated around 2 million people took advantage of the tax credit this year and projects it will continue to lift the market.
However, some housing analysts said the Realtors’ forecast was overly optimistic, as it was during the housing bubble. Economists like Patrick Newport argue the tax credit has already enticed many buyers who otherwise would have waited until next year.
“It induced first-time homebuyers who were going to buy a home in 2010 to buy in 2009 because they thought it wasn’t going to be extended,’’ said Newport, an economist at IHS Global Insight. He says home prices will fall between 3 and 5 percent next year.
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