With the nation watching housing like a spinning roulette wheel, data points are interesting to review, but few tell the whole story well enough to predict what might happen to housing in the coming year.

The National Association of Realtors® predicts that home sales will soften this year, with price gains slowing but remaining above historic norms, which means that homes will handily beat inflation.

"Sales of existing-homes, including single-family and condo, should ease 2.4 percent to a total of 6.62 million this year, second only to 6.78 million in 2004. New-home sales are forecast at 1.14 million in 2005, also the second highest, 5.0 percent less than the record of 1.20 million last year. Housing starts are expected to rise 1.4 percent to 1.98 million units in 2005, the highest level of housing construction since 1978," says the report.

"David Lereah, NAR's chief economist, said the supply of homes remains tight. "The simple fact is we still have more buyers than sellers in most of the country," he said. "This supply-demand imbalance is continuing to put pressure on home prices, but we should get closer to equilibrium by the end of the year."

Meanwhile, the national median existing-home price for all housing types is seen to grow 6.3 percent in 2005 to $196,900. The median new-home price is projected to increase 5.6 percent this year to $232,800. In a balanced market, home prices typically rise at the rate of inflation, as measured by the Consumer Price Index, plus 1 to 2 percentage points.

The question, of course is affordability for consumers, who may not recognize that even rising interest rates to slightly below 7 percent are still historically low and very favorable, as their other consumer debt and interest may rise as well, scuttling their ability to borrow to buy a home or trade up to a more expensive home.

A key figure to consider is the burgeoning investor and second-home buyer- now making up about 25 -33 percent of homebuyers. How little do conditions need to change before these buyers move to the sidelines?

Here are some other reasons the answers aren't clear.

Jobs: Nay. One bet that was lost was the number of jobs. Last week, the number of Americans filing new claims for unemployment fell to 334,000 from an upwardly revised 353,000 the previous week, but some economists had thought new claims would fall to 330,000.

Mortgage Rates: Yay. Loans, of course, are collatoralized by jobs. Rates on 30-year mortgages fell for the first time in two months last week because of weak job creation, which some say eased concerns about inflation. Rates had risen for seven consecutive weeks, and were at their highest since July 2004, and are approaching February's lows.

Rents: Yay. If rents are well below the cost of buying, it's a sure bet that homebuying speculation is going on. In a more balanced market, the cost of renting should closely parallel the cost of owning, say economists. In markets like Southern California, it's cheaper to rent, but in Dallas, it's cheaper to own. Yet, the National Association of Multi-family Housing maintains that we have half the housing built today to house the population in 2030, and that cities will embrace more multi-family housing because of infrastructure costs and lifestyle choices.

Foreclosures: Nay. According to Foreclosure.com, the number of foreclosed homes put up for sale rose 50 percent between February and March, one of the biggest monthly spikes the dot-com has seen since it began tracking the market in 1999. The survey showed 28,190 foreclosed homes were put up for sale nationally in March, 50 percent more than in February. More foreclosed properties are available for sale with a total of 80,757, up 10 percent from the previous month. Foreclosure.com gets its data from tracking government and financial institutions.

Published: April 13, 2005

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.