The NAR cuts its sales forecast ... again

It's like deja vu all over again -- the National Association of Realtors is cutting its 2007 and 2008 existing home sales forecasts. Here is a brief history of their calls over the past several months (forecasts are in millions of units). It shows that NAR's optimism about 2007 peaked in February, and has now dropped four months in a row. The actual Seasonally Adjusted Annual Rate of sales in the most recent month (April) was 5.99 million units.

Date of forecast ------ 2007 sales est. -------- 2008 sales est.
6/6/07 --------------------6.18-------------------- 6.41
5/9/07 --------------------6.29-------------------- 6.49
4/19/07 -------------------6.34-------------------- 6.52
3/13/07 -------------------6.42-------------------- 6.66
2/7/07 --------------------6.44-------------------- 6.64
1/10/07 -------------------6.42---(none referenced in release)
12/11/06 ------------------6.40---(none referenced in release)
11/10/06 ------------------6.43---(none referenced in release)

I have nothing against blown forecasts -- we all make 'em. What I can't stomach is how every single month, one after the other, there always seems to be some new sunny spin put on the numbers by certain interested parties. Remember, it was just this past fall that we were told it was "a great time to buy or sell a home."

The fact is, we have the biggest housing supply overhang (in raw numbers) in U.S. history and we have home prices that are still relatively unaffordable (and way out of whack with median incomes, rental costs, etc.) On top of all that, interest rates are starting to rise again. None of that bodes well for the housing market, in my view. That's reality -- not a bunch of happy talk.