NAR to Fed Reserve: Slow Down Interest Rate, Florida Home Loan Rate Hikes

A break from scorching hot housing markets isn’t necessarily a bad thing, according to David Lereah, the chief economist from The National Association of Realtors. This real estate expert said “we need a solid housing sector to provide an underlying base to the economy, and slower appreciation will help to preserve long-term affordability” for buyers seeking Florida home loans.

On Tuesday, however, the NAR lowered its forecast for U.S. home sales in 2006 and called on the Federal Reserve to stop raising interest/Florida home loan rates because parts of the housing market are “vulnerable.”

“This is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable,” Lereah said.

The trade group, in its monthly forecast, said sales of existing homes should fall 6.8 percent (to 6.60 million) this year from the 2005 record of 7.08 million. Sales of new homes should decline 13.4 percent (to 1.11 million) from a record 1.28 million a year ago.

The Realtors said housing starts should also fall 6.2 percent in 2006. The national housing market has been steadily cooling down after a five-year run that shattered sales and construction records. It began to slow last year as Florida home loan rates started to climb. Various studies do predict a strong real estate market in the coming months, however.

Another estimate said the 30-year fixed-rate Florida home loan should average 6.9 percent during the second half of the year. Meanwhole, the national median existing-home price for all housing types is forecasted to rise 5.3 percent to $231,300.