Home sales and prices throughout most of the country are poised for improvement in the second half of 2008, and the recovery will vary by market, said NAR Chief Economist Lawrence Yun at a recent meeting.
Middle-America cities that performed evenly over the past few years -- like Cincinnati, Milwaukee and the Kansas City, Mo., area -- are likely to experience home price gains in the 20 to 30 percent range over the next five years, while markets like Miami, Las Vegas and Phoenix could see prices go up as much as 50 percent during that time period, according to Yun.
Yun blamed most of the softening of the housing market over the last year on the "subprime mess," where consumers with blemished credit records got loans they couldn't afford when the interest rates reset to higher levels.
Yun urged the Congress and White House to enact NAR-supported legislation to modernize FHA programs, reform regulation affecting Fannie Mae and Freddie Mac, establish a first-time home buyer tax credit, and make the temporary increases to the conforming loan limits established by the Economic Stimulus Act of 2008 permanent.
"These measures would quickly stabilize the housing markets and get fence-sitters into the market to buy homes," said Yun. "There are many reasons for people to get into the housing market today, and very few reasons not to. With the plentiful supply of homes for sale at affordable prices, interest rates approaching 40-year lows, and the strong track record of housing as a good long-term investment, conditions are ripe for buyers
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