Hot Housing Market
March 6, 2002
Realtors Group Still Predicts Another Brisk Year For Home Sales
Inman News Features
The National Association of Realtors? latest housing forecast continues the association?s prediction that existing-home sales this year will be near, but somewhat lower than last year's record.
NAR Chief Economist Dr. David Lereah said today the factors necessary for a strong housing market still are in place.
"As the economy picks up steam in the second half of the year, a rise in jobs and consumer confidence will more than offset slightly higher interest rates. That will boost consumer confidence in purchasing high-ticket items such as homes and keep the housing market in record territory," he said.
NAR?s forecast expects existing-home sales to slip 0.5 percent this year to 5.27 million units, second only to last year's record of 5.3 million home sales.
New-home sales are projected to drop 4.1 percent from a record 906,000 last year to a total of 870,000 this year.
Housing starts are expected to decline 2.3 percent to a total of 1.57 million units.
Lereah expects U.S. economic growth as measured by the gross domestic product to rise gradually to 3.1 percent in the fourth quarter.
Consumer price inflation should be only 1.6 percent.
But the 30-year fixed mortgage interest rate is expected to rise to 7.3 percent by the third quarter.
"Despite an uptick in mortgage interest rates, affordability will remain favorable for most households in most areas," Lereah said.
NAR expects the national median existing-home price to rise 5.1 percent to $155,400 in 2002. The typical new home price is projected to increase 6.1 percent to $184,700 this year.
Copyright: Inman News Service