NAR: Rates Should Keep Housing Strong

Favorable mortgage interest rates should help maintain a strong housing market this year, according to the National Association of Realtors.In the association's February economic and housing forecast, NAR chief economist David Lereah said the organization is predicting existing-home sales of 5.40 million units this year, second only to the record 5.56 million units in 2002, and 959,000 new-home sales, down modestly from last year's record of 976,000. "Growth in the U.S. gross domestic product should rise to 2.9% this year from 2.4% in 2002; however, we project the GDP will pick up steam and reach an annual growth rate of 4.1% in the fourth quarter," Mr. Lereah said. "The silver lining will be a continuation of affordable mortgage interest rates, especially during the first half of this year, which will help to sustain the strong momentum we currently have in the housing market." The NAR economist said he expects the 30-year fixed mortgage rate to average 6.2% in the first half before rising to 6.6% in the fourth quarter. The NAR can be found on the Internet at http://realtor.org.