NAR: Higher Rates Won't Curb Housing

Interest rates are rising due to "healthy economic growth" and therefore won't curb the overall strength of the housing market this year, according to the National Association of Realtors.In the association's July real estate outlook, NAR chief economist David Lereah said the unemployment rate should fall to 5.2% by the beginning of next year. "The reason interest rates are higher is that we are in a growing economy rather than dealing with inflationary pressures," Mr. Lereah said. "This is good news, because corporate profits are up 40% from two years ago, so companies are spending and jobs are being created at a strong pace. In the housing markets, this is largely neutralizing the effects of modestly higher interest rates." The NAR economist said the 30-year fixed mortgage rate should reach 6.7% by the fourth quarter. The NAR can be found on the Internet at http://realtor.org.