Realtors Association says housing sales will fall in '06

The National Association of Realtors says next year's housing sales won't break 2005 records but should still be the second-highest on record.

It also expects rising prices to cool considerably in 2006.

The Washington-based group's new forecast calls for new-home sales to fall 4.8 percent next year. Existing-home sales, which account for about 85 percent of housing sales, will fall 3.7 percent in 2006, the NAR says.

"The slowdown amounts to a tapping of the brakes on a hot market," says NAR chief economist David Lereah. "Home sales are coming down from the mountain peak, but they will level-out at a high plateau -- a plateau that is higher than previous peaks in the housing market."

The group also expects 30-year mortgages to rise to an average of 6.6 percent in 2006, and the median price of existing homes to rise 6.1 percent, half the pace of housing appreciation during the last 12 months.

Housing sales for 2005 are on track for the fifth consecutive record, with new- home sales likely to hit 1.29 million and existing-home sales to reach 7.1 million this year.