Home prices are going down but still the potential buyers are still not buying. They are expecting more declines to come. Also, as long as they have not seen the price going up, buyers will not invest or buy a new house. This kind of eventuality would lead to more price declines.

According to the forecast by the National Association of Realtors(NAR) in July 11, 2007, the slump in home sales and prices will last longer than previously expected. With what is happening, the Realtors' latest forecast pushed back further the price recovery to 2nd quarter 2008.

For the rest of 2007, the market expects to see more year over year decline for new homes till the first quarter of 2008.

The industry has never seen a full-year decline in existing home prices in the nearly 40 years. This is based on the national sales statistics compilation of the National Realtors Association.

Both new and existing home prices are now expected to show a less than 1 percent gain in the second quarter of next year, according to the latest forecasts. Those increases are less than what was previously forecasted.

According to Lawrence Yun, NAR senior economist, said a good buyers’ market has evolved. “Buyers now have an overwhelming advantage given the wide selection of homes available in many markets,” he said. “But with profit margins coming under pressure, homebuilders will limit new construction well into 2008. This should help the overall inventory level to move steadily into a more balanced state.”