Another Home Sales Record Possible?

Based on the recent and surprising decline in mortgage rates and the continued disappointing employment numbers, the chief economist of the National Association of Home Builders now believes housing could see record home sales again in 2004.As recently as a week ago, David Seiders was predicting that new- and existing-home sales would decline slightly this year from last year's all-time high. He based his projection on the belief that the Federal Reserve Board would start driving up interest rates shortly after the November election. But now, he said at the NAHB's convention, there's "a distinct chance" the central bank will hold the federal funds rate at 1% "through the entire year," giving sales a chance to "be as good as 2003 or even better." David Berson, chief economist at Fannie Mae, also said it's possible 2004 "could be the fourth year in a row for record sales." But he stopped short of predicting it would, sticking to his earlier projection that sales will slow by about 5%. "But if I'm wrong," he added, "sales will be stronger, not weaker, and we could well have a fourth record year." The NAHB can be found online at http://www.nahb.com.