Sales of existing homes bottomed out in the fourth quarter, but house prices will continue to decline in the first quarter, according to the latest forecast by the National Association of Realtors.Sales of previously owned houses declined 8.2% in 2006 to 6.5 million, the third-highest level on record. NAR economists project that sales will rise gradually during 2007 but still show a 1.2% decline at year-end. "The good news is that the steady improvement in sales will support price appreciation moving forward," NAR chief economist David Lereah said. Median house prices fell from $225,000 in the third quarter to $216.5 in the fourth quarter, or 3.2%. NAR economists say they expect to see prices decline in January and February before turning up in the second quarter of 2007. "The national median existing-home price for all of 2006 is expected to rise 1.1% to $222,100 and then gain 1.5% this year to $225,300," the NAR said. The association can be found online at http://www.realtor.org.

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