New home sales hit record high in 2001

Associated Press

Carpenters and roofers yesterday in Round Lake, Ill., were working on a new house being built by Centex. Despite the recession, U.S.home sales remain strong. Bloomberg News Service

The Commerce Department reported yesterday that a record 900,000 new single-family homes were sold in 2001, a testimony to the resiliency of the housing market, one of the economy's few bright spots.

Last year's sales performance surpassed the record of 886,000 set in 1998 and represented a 2.6 percent increase from sales registered in 2000.

"The housing market was the shining star in a very dark constellation," said Joel Naroff of Naroff Economic Advisors. "While manufacturing and technology and investment collapsed, households still showed their confidence in the future by purchasing homes at a record pace."

Sales for existing homes reached an all-time high of 5.25 million last year, the National Association of Realtors said last week.

Analysts marveled at the strength of the housing sector given last year's economic turbulence. The country slid into a recession in March and just as the economy was beginning to show some signs of a rebound, the Sept. 11 terror attacks occurred.

A key reason the housing market managed to hold up so well was because of low mortgage rates, analysts said. The average rate for a 30-year fixed-rate mortgage last year was 6.97 percent, the lowest annual average rate since 1998.