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Home Sales Expected to Lift in 2012: NAR

Today's record-low mortgage rates and southerly home sales will post gains into next year, according to the economist with one trade group.

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""Lawrence Yun"":http://www.realtor.org/research/chief_economist_bio, chief economist with the ""National Association of Realtors"":http://www.realtor.org/ (NAR), predicted at the 2011 Realtors Conference and Expo that home sales and existing-home sales would rise, along with mortgage rates.

He said that GDP would climb from a 1.8-percent slump to 2.2 percent over next year, as job growth marches toward 2.2 million and the unemployment rate falls to 8.7 percent.

""Tight mortgage credit conditions have been holding back home buyers all year, and consumer confidence has been shaky recently,"" he said in a statement.

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""Nonetheless, there is a sizeable pent-up demand based on population growth, employment levels and a doubling-up phenomenon that can't continue indefinitely,"" he added. ""This demand could quickly stimulate the market when conditions improve.""

Yun said that existing-home sales would likely crawl to 1 percent in 2011, then hit a stride at 4 percent or 5 percent, with figures in the home-sales category approaching 4.96 million this year.

He projected that new-home sales would likely slam into a record-low 302,000 over 2011 but hit a new stride at 372,000 next year, with housing starts expected to ascend to 630,000, up from 583,000, over 2011.

""Once home prices turn positive on a sustained basis, consumer confidence will rise and help the broader economy to improve,"" Yun said. ""If we could maintain sound and reasonable mortgage underwriting standards, the market would be able to avoid a future big boom and bust cycle, but mortgage standards remain overly stringent.""

""Richard Peach"":http://www.newyorkfed.org/research/economists/peach/index.html, SVP with the ""Federal Reserve Board of New York"":http://www.newyorkfed.org/index.html, described the economy as one that continued to underperform but retained the potential to carry forward.

""Nearly two-and-a-half years since the end of 'the great recession,' the economy continues to operate well below its potential,"" he said in the statement. ""Among the significant structural impediments are the legacy of the housing boom and bust, and fiscal contrition at the state and local level.""

About Author: Ryan Schuette

Ryan Schuette is a journalist, cartoonist, and social entrepreneur with several years of experience in real-estate news, international reporting, and business management. He currently lives in the Washington, D.C., area, where he freelances for DS News and MReport.
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