Dr. David Lereah says he expects the 30-year fixed mortgage interest rate to average 6.9% this year, down from 8.1% last year. "With interest rates near 30-year lows and historically low unemployment, we now expect both new and existing-home sales, along with housing construction, to increase during 2001," he says.

Despite the fact other sectors of the economy are hurting, Lereah projects existing-home sales to rise 1.6% this year to a total of 5.19 million units, while new-home sales should rise 2% to a total of 921,000 units. "This means we now expect 2001 to be the second-best year on record for existing-home sales, and it'll set a record for new-home sales," he notes.

NAR expects housing starts to rise 1.8% to a total of 1.62 million units this year, matching a construction pace not seen since 1987. The NAR predicts the national median price for existing homes to be $144,600, a 4% increase over 2000, while typical new home price is expected to be $173,900 this year, up 4.6% from 2000.