Forecasters: Rates to 6.5%, Sales Off 6.4%

Bond market economists are forecasting that mortgage rates will rise to 6.5% by the end of 2005 and that home sales will decline by 6.4% from this year's record pace.Members of The Bond Market Association's economic advisory committee say they expect that the "flattening of the 2-year to 10-year yield curve will continue" in 2005. "Median forecasts for the 30-year fixed-rate mortgage have the rate rising from 5.8% to 6.2% at midyear and 6.5% by the end of 2005," according to the survey of 24 economists. Meanwhile, new- and existing-home sales will "slow modestly" from 7.8 million units this year to 7.3 million units in 2005, they predicted. The association can be found on the Web at http://www.bondmarkets.com.