The NAR is calling for the Fed to hold rates steady. "The National Association of Realtors on Tuesday lowered its forecast for U.S. home sales in 2006 and called on the Federal Reserve to stop raising interest rates because parts of the housing market are 'vulnerable.'"

"'Experiencing a slowing from a hot market is a good thing because we need a solid housing sector to provide an underlying base to the economy, and slower appreciation will help to preserve long-term affordability,' said David Lereah, the group's chief economist."

"'But this is a time for the Fed to pause on rate hikes because we have some interest-sensitive housing markets that have become vulnerable,' he said."

"The trade group, in its monthly forecast, said sales of existing homes should fall 6.8 percent to 6.60 million this year from the 2005 record of 7.08 million. Sales of new homes should decline 13.4 percent to 1.11 million from a record 1.28 million in 2005."

"That is below the group's earlier forecast of 6.62 million existing home sales and 1.13 million new homes sales in 2006."

"NAR President Thomas M. Stevens said rising interest rates have slowed home sales in many high cost markets, while job growth has boosted sales in some moderately priced areas. 'Broadly speaking, rising inventories have taken the pressure off of unsustainable home price growth,' said Stevens. 'For most of the nation, this means future home price gains will be much closer to the normal returns we expect from housing.'"

"'Historically, home prices rise 1.5 to 2 percentage points faster than the rate of inflation, so the rise we anticipate in existing home prices this year is actually a little above the high end of historic norms,' Lereah said."