Realtors Update '05 Forecast

The National Association of Realtors has updated its forecast that 2005 will be a record year because of stronger-than-expected housing sales and continued low mortgage rates.Existing-home sales are expected to rise 2.8% to 6.97 million this year, up from the record 6.78 million in 2004. (A month ago, the NAR predicted resales would total 6.89 million.) Meanwhile, new-home sale should increase 3.2% to 1.24 million in 2005, which would also be a record, the NAR said. "[M]ortgage interest rates have remained lower than expected, and job gains are providing additional stimulus" to the housing market, said NAR chief economist David Lereah. The NAR is also forecasting that house price appreciation will top last year's mark, which was the highest since 1980. Mr. Lereah projects that the national median existing-home price will rise by 9.4% this year, up from 8.3% in 2004.