The NAR projects growth in the U.S. gross domestic product (GDP) to rise to an annual growth rate of 5.6 percent in the current quarter, with GDP for all 2003 increasing 2.8 percent before growing another 4.0 percent next year. Consumer price inflation should be 2.4 percent for this year and only 1.6 percent in 2004.
The NAR forecasts a record of 5.89 million existing-home sales this year, up 5.8 percent from 5.57 million sales in 2002. New-home sales should grow by 8.2 percent to a record of 1.05 million units. Housing starts are expected to increase 3.9 percent to a total of 1.77 million units, the highest level since the impact of the baby boom generation in 1979.
2004 is seen to be the third-best year for housing, with 5.48 million existing-home sales and 944,000 new-home sales. The national median existing-home price is forecast to rise 6.8 percent in 2003 to $169,000, while the median new-home price should increase 3.3 percent to $193,800. Overall home price appreciation is expected to moderate somewhat next year, with the medians rising 4.9 percent and 5.4 percent respectively.