NAR Economist Predicts Big Year for Housing Market

WASHINGTON, DC-The National Association of Realtor’s chief economist predicts lower mortgage interest rates will boost all areas of the housing market in 2001, with new records being set for new home sales. NAR expects the country’s economic growth, as measured by the Gross Domestic Product, to be 1.9%, rising from a 0.5% growth rate in the first quarter to 3.6% by the end of the year. Consumer price inflation for this year will be 3.1%.

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. <p.The NAR predicts unemployment to average around 4.4% this year, with a rise in personal income of 2.1%, adjusted for inflation. “In other words, people with good jobs are looking at very good housing affordability conditions in most of the country–they're getting into the market and are helping to stimulate economic growth,” he says.