NAR Revises Housing Forecasts

The National Association of Realtors is still forecasting record home sales this year for both new and existing homes, but it has lowered its predicted sales levels while hiking its projection for mortgage rates.The revised forecast calls for 5.65 million resales in 2003, up 1.5% from a record 5.57 million in 2002 (but down from the 5.73 million in the NAR's July forecast). New-home sales are now projected at a record 992,000 (down from 1.0 million in last month's forecast), and housing starts are expected to rise 0.4% to 1.71 million. "We now think the 30-year fixed [mortgage rate] should stay below 6.5% for the balance of 2003, and that's still very favorable when you look at where rates have been over the last four decades," said David Lereah, the NAR's chief economist. The trade group was forecasting a 7.0% mortgage rate by year-end in January, but by July it had lowered the forecast dramatically, to 5.7%. The NAR can be found online at http://realtor.org.