Home resales likely to break 2001 record

Bloomberg News Service

U.S. sales of previously owned homes will beat last year's record, helped by an improving job market, rising consumer confidence and a growing population, the National Association of Realtors said.

Some 5.31 million existing homes will probably be sold this year after 5.3 million in 2001, the group said. The forecast, revised from a previous estimate of 5.2 million, follows record monthly sales in January and February.

"Even with sales easing off the big numbers at the beginning of the year, we expect existing home sales to rise," David Lereah, the group's chief economist, said last week in a statement.

O'ahu's housing resales, although essentially flat last month compared with the same month a year ago, remain strong and have been keeping pace with the Mainland, local industry analysts say.

The U.S. economy will probably grow at a 3 percent rate for the rest of the year after expanding at 5 percent in the quarter that just ended, Lereah said. The slower pace will keep mortgages from rising much more, he said.

The 30-year fixed mortgage rate will probably reach 7.5 percent at the year's end, based on the forecast. "This will not have much of a braking effect on housing markets," Lereah said.

The association expects sales of new homes, which account for 15 percent of the market, to slow to 869,000 this year from a record 907,000 in 2001. Housing starts will probably total 1.61 million, up from 1.6 million last year.