Residential property prices in the USA are expected to continue falling throughout the rest of 2006, but only fractionally, according to the National Association of Realtors (NAR).

In addition, NAR noted that the sellers’ market is transitioning to a buyers’ market, which can be healthy for some local economies.

When addressing the Senate Subcommittee on Housing and Transportation and the Senate Subcommittee on Economic Policy last week, Thomas M. Stevens, president of NAR, said: "For the past five years, the housing market has been a steadfast leader in the U.S. economy.

"After five years of outstanding growth, the housing market is undergoing a period of adjustment and becoming more and more of a balanced market between buyers and sellers.

"Contrary to many reports, there is not a national housing bubble. We were seeing home prices and mortgage debt servicing cost-to-income ratios increase to unhealthy levels in some housing markets, which precipitate an adjustment."
NAR forecasts a drop in home sales of around 8% in 2006, followed by another 2% fall in 2007. While NAR also predicts that house price growth in the USA will be less than 3% in 2006 and 2007.