Real estate prices expected
to climb
Homes sales on
record pace this year
Tuesday,
July 06, 2004
Inman
News
|
 David
Lereah, NAR
|
Existing-home
sales and new-home sales are expected to reach record highs this year and
home prices are expected to grow about 7-8 percent, the National
Association of Realtors announced today in an annual forecast that is revised
monthly.
The July
forecast estimates that the 30-year fixed-rate mortgage will reach 6.7
percent this year. That estimate has been scaled back since last month's
forecast, when the association projected a 6.9 percent rate by
year-end.
David Lereah,
chief economist for the association, said the expected rise in interest
rates is good news for the overall economy. "Corporate profits are up 40
percent from two years ago, so companies are spending and jobs are being
created at a strong pace," he said in a
statement.
The best web templates providers online who offer high quality web Templates HTML web templates for both novice and experienced users. Build your own website with a professional web template. "In the housing
markets, this is largely neutralizing the effects of modestly higher
interest rates. In fact, mortgage interest rates will remain very
favorable in historic terms for the foreseeable future," he added. "One
concern is for lower-income home buyers who are affected the most by a
rise in financing costs our hope is that the improving job market will
provide the means to also afford decent housing at the lower rungs of the
housing ladder."
Existing-home
prices are expected to rise 6.7 percent this year to $181,500, while
median new-home prices are forecast to rise 7.9 percent this year to
$209,600. The June forecast called for existing-home prices to reach
$179,200 and new-home prices to reach
$210,400.
Existing-home
sales are expected to reach a record 6.31 million this year, or 3.4
percent above last year's record numbers. And new-home sales are expected
to rise 6.4 percent to 1.16 million this year. Housing starts, meanwhile,
are expected to grow 2.6 percent this year to 1.9 million, the highest
level since 1978.
NAR projects the
U.S. gross domestic product to grow 4.5 percent this year, unemployment to
drop to 5.2 percent, and the Consumer Price Index to rise 2.7 percent in
2004. Inflation-adjusted disposable personal income is expected to grow by
3.8 percent this year, and the consumer confidence index will trend up to
101 in the fourth quarter.
***
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Inman
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