NAR: War With Iraq Won't Dent Housing

Although housing must "ultimately co-exist" with the rest of the economy, not even a prolonged war with Iraq will put much of a dent in the market, the chief economist of the National Association of Realtors said over the weekend at the NAR's annual convention in New Orleans.At worst, David Lereah said, a war will bring existing-home sales down to the 5.1 million-a-year level, or about the equivalent of a 150-basis-point increase in loan rates. "That's still a pretty healthy housing environment," he said. On the other hand, a short-lived fight like the Gulf War a decade ago would cause only a brief dip in the market. Some people will postpone buying, "but they will come right back" once the fighting is over, the NAR economist said. Absent any conflict, Mr. Lereah is predicting that mortgage rates will rise "modestly" to an average of 6.8% next year, driving existing-home sales down only marginally to 5.27 million. Even at that, 2003 would still go down as the third-best year ever for resale houses. When the final tally for 2002 is taken, he projects that sales will reach a record 5.47 million units, a 3.4% increase from 2001. The NAR can be found online at http://realtor.org.