Strong market predicted despite "dampening effect" on pending sales
Pending sales of existing homes fell 6% in March compared with March 2005, according to data released earlier this week by NAR. The pending sales data is another indicator that the market is easing back from the stronger pace of the past couple of years. "...[T]he pending sales data is showing a dampening effect from rising mortgage interest rates that have been trending up since January," said NAR Chief Economist David Lereah. "This means a modest slowing can be expected in the sales pace in the months ahead, although the market will hold at historically strong levels." Analyst Michael Youngblood, with Friedman Billings Ramsey & Co., also believes housing will remain strong in most of the nation's local markets. "House prices don't plunge immediately in economic downturns the way stock prices do," he told Business Week. "Getting a job or a salary increase is what motivates people to buy their own home."
