NAR: Another Record Year for Housing

Home sales will set another record this year -- the fifth in a row -- as a result of lower-than-expected mortgage interest rates, according to the latest forecast by the National Association of Realtors.The NAR is now forecasting 6.89 million existing-home sales for 2005, which would exceed last year's record of 6.78 million by 1.6%. The forecast for new-home sales calls for an increase of 3.2%, to 1.24 million, and housing starts are projected to rise 3.4% to 2.02 million, the highest level since 1973. "Not only have mortgage interest rates declined, but an expected rise in the second half of the year will be slower than in earlier projections," said NAR chief economist David Lereah. "As a result, we now expect to set records for both existing- and new-home sales this year." The NAR is now forecasting that the 30-year fixed mortgage rate will rise to only 6.1% in the fourth quarter and to reach 6.5% by the end of 2006. The association can be found online at http://www.realtor.org.