Home building and home sales will continue to slacken for the rest of the year, according to the June forecast of the Mortgage Bankers Association.
The trade group sees second-quarter sales of existing homes falling 3.9% from the first-quarter level and projects further quarter-to-quarter declines of 2% in the third quarter and 1.7% in the fourth. In all, 3.93 million homes will be resold this year, a drop of 4% from last year's record sales, the MBA estimates.
It is also projecting that 1.09 single-family homes will be started in 1997, down almost 6% from 1996. Though new home sales will slow through the year, total sales will hit a level of 759,000 new units, a 0.4% gain.
David Lereah, the group's chief economist, says actual sales and home building may be stronger if the economy remains soft this summer and low interest rates persist. His forecast now assumes the Federal Reserve Board will raise short-term rates by 50 basis points by yearend.