Industry News

Realtor association expects home sales to dip 2% in 2005

U.S. existing-home prices forecast to rise 5% this year

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Home sales are forecast to reach levels in 2005 that are second only to the record set in 2004, the National Association of Realtors reported today. Existing-home sales are forecast to decline 2 percent this year to a total of 6.54 million, compared with 6.68 million in 2004. New-home sales are projected at 1.11 million this year, down 6.2 percent from a record 1.18 million in 2004. Housing starts are seen at 1.92 million units this year, a decline of 1.8 percent from 1.95 million 2004, which was the highest level of housing construction since 1978. David Lereah, chief economist for the association, said, "Even with a growing economy and improving job market, inflation should stay tame with only modest upward pressure on interest rates. The relationship between mortgage interest rates, family income and home prices will remain favorable for home buyers in most of the country." Lereah forecasts the 30-year fixed-rate mortgage to rise modestly to 6.3 percent by the end of the year, ...