NAR Forecasts Record Home Sales

Home sales this year will beat earlier projections and easily exceed last year's record for both new and existing homes, according to the National Association of Realtors.David Lereah, the NAR's chief economist, said lower-than-expected mortgage rates are the primary factor behind the revised forecast, which now calls for 5.73 million resales in 2003, up 2.9% from a record 5.57 million in 2002. New-home sales are now projected at 1.0 million, up 3.1%, and housing starts are expected to rise 0.5% to 1.71 million. "Mortgage interest rates appear to have reached bottom and are likely to rise slowly to the range of 5.7% for a 30-year fixed-rate by the end of the year," Mr. Lereah said. "With a tight inventory of homes available for sale, home prices will continue to rise above historic norms." The NAR is forecasting a 3.8% rise in the national median price for new homes this year, to $194,700, and a 6.0% increase in median resale prices, to $167,800. The NAR can be found online at http://realtor.org.