Nationwide home sales are expected to reach annual levels similar to 2006, despite the recent weather patterns and challenges in subprime lending that have created ambiguity in the U.S. housing market, according to NAR’s recent forecast. Existing-home sales should improve from the cyclical low experienced last fall and are projected to reach 6.42 million in 2007, according to the report. New-home sales are forecast at 950,000, down from 1.06 million in 2006.

Although the picture is somewhat unclear right now, "underlying trends point to a housing recovery in 2007," said NAR Chief Economist David Lereah. With winter storms likely to affect home sales in March, an upturn in closed transactions may not be evident until later this spring.