Dr. David Lereah, NAR's chief economist, said home sales this year have defied projections. "The housing market is proving to be much more resilient than most analysts expected, and we will be just shy of the all-time record for existing home sales, which was 5.21 million transactions in 1999," he said.
"In addition, new-home sales will set a new record this year, so it doesn't get much better than this."
Lereah said existing-home sales will rise 1.6% this year to a total of 5.20 million units, the second highest on record, then slip 1% to 5.15 million in 2002, which would be the third-best year.
New-home sales will increase 0.8% in 2001 to a total of 888,000 units, then ease by 0.4% next year to 885,000 units, which would tie the previous record in 1998. He forecasts housing starts to grow by 1.6% to a total of 1.60 million units this year, and then decline 3.5% in 2002 to 1.55 million units.
Lereah expects the 30-year fixed mortgage interest rate to rise gradually to 7.2% by the second half of 2002, after bottoming-out at an average of 6.7% for the fourth quarter of this year. "Even with the uptick in mortgage interest rates, these are still relatively low rates and we expect favorable affordability conditions to prevail in the coming year," he said.
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