NAR is reporting that sales activity will continue to be soft in the months ahead but should see gradual improvement during the second half of 2008. The chances of a improved 2nd half will increase dramatically if the loan limits are increased.

NAR reports in its latest forcast that projected home sales to be at a pace of 4.9 million in the first half of the year and should rise to 5.8 million in the second half before leveling off to 5.60 million for all of 2009. You can compare that to existing home sales of 5.65 million in 2007. Existing-home prices are expected to fall 1.2% in 2008 to $216,300 and rise 3.2% to $223,200 in 2009. National median existing-home prices fell 1.4% in 2007.

NAR also projects new home sales to decline 17.7 percent in 2008 to 637,000 and then climb 7.6 percent to 685,000 in 2009.

Lawrance Yun, NAR's chief economist says higher loan limits for conventional mortgages could have a positive impact on sales."If higher limits are inacted very quickly, we'll see faster and more meaningful recovery by expanding safe, affordable financing in high cost areas-that in turn, would help to stimulate overall economic activity."