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Stronger-than-expected home sales activity so far this year, combined with a continued drop in mortgage interest rates, means the housing sector is likely to set a sales record in 2003, according to the National Association of Realtors.
David Lereah, the association's chief economist, said the forecast has been steadily upgraded all year. "The performance of the current housing market is nothing short of astounding," he said. "Record low mortgage interest rates, a growing number of households, rising consumer confidence and an improving economy mean we probably will set a third consecutive record for both existing- and new-home sales this year."
Lereah expects 5.59 million existing-home sales in 2003, up 0.5 percent from the record of 5.57 million sales last year. New-home sales are projected at 974,000 units, up 0.1 percent from 2002. Housing starts should rise 1.0 percent to a total of 1.72 million units in 2003.
"The 30-year fixed mortgage interest rate should remain historically low and edge up only slightly, to about 5.7 percent in the fourth quarter, stimulating both home sales and refinance activity—both should contribute to overall economic growth in 2003," Lereah said.
Information provided in this column is presented by the Realtor members of the Silicon Valley Association of Realtors at www.silvar.org. Send questions on any topic to jnewton@jnpr.com.
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