Sales expected to rise in 2011, 2012

The housing market has sustained a year of instability, though a new report says the new year will bring a positive surge of new moving activity.

Fannie Mae released its housing market forecast for November, revealing elevated expectations for home prices, interest rates and home sales. Prices, for instance, have dropped 0.6 percent this year, but the company expects them to increase 0.5 percent by next year and 4.3 percent by 2012, meaning those moving into new homes now might not have to sustain significant home price cuts into the future. At the same time, interest rates will remain low, making homebuying as affordable as ever.

"For all of 2010, total home sales are projected to decline by about 8 percent from 2009, marking the bottom of annual total home sales in this cycle," said Fannie Mae chief economist Doug Duncan. "We expect home sales to increase by about 3 percent in 2011." He added that the predictions could improve depending on how the labor market performs.

Experts say that though home sales remain low, moving into a new home remains as affordable as its been in two decades. The National Association of Home Builders reported that 72.1 percent of all homes sold during this year's third quarter were affordable to families earning the nation's median income of $64,400.
 

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