NAHB Sees 15% Drop in Starts Next Year

Homebuilders are forecasting that housing starts will bottom out early next year, but they say they still expect a 15% decline in single-family starts, similar to this year's decline.Housing starts will be negative in the first quarter and steadily increase over the next three quarters, according to National Association of Home Builders economist David Seiders. New-home sales will be flat in 2007 after this year's 17.6% decline, he told reporters. Meanwhile, purchase mortgage originations declined this year, and Fannie Mae chief economist David Berson says he expects a larger decline in 2007. "It will be the first two-year fall in purchase originations since the early '90s," Mr. Berson said. His forecast calls for purchase originations to decline to $1.28 trillion in 2007, down from $1.45 trillion in 2006 and $1.51 trillion in 2005. Existing-home sales should be off 1% in 2007 following a 9% decline in 2006, according to National Association of Realtors chief economist David Lereah.