Industry News

Job growth poised to drive real estate

Realtors association predicts increased consumer spending in second half of 2004

With mortgage interest rates remaining historically low, continued strength in the housing market will depend more on improvement in the labor markets, according to the National Association of Realtors. David Lereah, NAR's chief economist, said the 30-year fixed-rate mortgage will move modestly higher this year. "Fixed-rate loans currently are around 5.7 percent, but we project a gradual rise to 6.5 percent in the fourth quarter," he said. "As interest rates move up, the strength of the housing market will depend largely on job growth, which we expect to accelerate and drive demand for homes as the year progresses." Lereah said the unemployment rate should decline to 5.5 percent by the fourth quarter. "The economy is solid, and job gains in the second quarter should lead to increased spending in the second half of the year." Growth in the U.S. gross domestic product is forecast at 4.6 percent this year. "Business spending is accelerating and record profits will help to stimulate a...

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