Price drop for homes predicted

The National Assn. of Realtors on Wednesday said it expected the national median price for existing homes to drop this year for the first time since the trade group began keeping records in the late 1960s.

The association also lowered its 2007 sales forecast for new and existing homes. Tighter lending standards and the continued fallout from the sub-prime mortgage market are to blame, spokesman Walter Molony said.

The trade group is forecasting a 0.7% drop in 2007 for the national median price for existing homes after a 1% gain last year.

The national median new-home sale price is projected to rise 0.4% after a 1.8% gain last year, according to the association.

However, the trade group forecasts a 14.2% decline in new-home sales this year, compared with its previous estimate of a 9.8% slide.

The group estimates that existing-home sales will fall 2.2%, compared with its previous forecast of a 0.9% decline.