The National Association of Realtors has backpedaled on previous housing forecasts with it U.S. Economic Outlook report for June released on Wednesday.

NAR has consistently asserted that the housing bubble would not burst but rather would deflate and, when it happened, there would be a soft landing. The Economic Outlook report released on January 10, 2007 stated, "After bottoming in the fourth quarter of 2006, existing-home sales are forecast to gradually rise through 2007 and into 2008, while new-home sales should turnaround by summer."

Long-time NAR chief economist David Lereah predicted that annual totals for existing-home sales would be fairly comparable between 2006 and 2007. "We have to keep in mind that we were still in boom conditions during the first quarter of 2006 with a high sales volume and double-digit price appreciation. We are starting 2007 from a relatively low point, so even with a gradual improvement in sales it'll be pretty much of a wash in terms of annual totals. The good news is that the steady improvement in sales will support price appreciation moving forward."

The June report is the second overseen by the new NAR chief economist Lawrence Yun following the departure of the consistently upbeat Lereah. Of course in those two months much has happened; lending standards have been tightened, high risk buyers have at least temporarily been pushed to the sidelines, and interest rates have risen. Whether coincidental to the changing of the guard at NAR or not, for the last two months projections for the recovery have been dialed back.

The June forecast is for sales of existing homes to total 6.18 million in 2007 year and 6.41 million next year compared to 6.48 million in 2006, a negative change of 4.6 percent. New-home sales will total 860,000 in 2007 and 901,000 in 2008 compared with 1.05 million last year, a decline of 18.2 percent.

Housing starts are now projected at 1.434 million, a precipitous drop of 20.4 percent from last year but will increase to 1.487 million in 2008 (+3.6 percent.)

Both existing and new home prices are expected to decline this year from 2006 levels. The median existing home price will be $219,100 (-1.3 percent) and new homes will sell for a median price of $240,800 (-2.3 percent.) Both categories of homes are still projected to bounce back price wise next year, coming in at a median of $222,700 and $247,000 respectively.

It is most instructive, however, to look at these figures side by side with those forecast by NAR in January and April to see how the Association's conviction about a soft landing is cooling and how fast that cool-down has been.