Like a comic book hero who cannot be slain, the nation's housing market charges ahead.
Last week, the National Association of Realtors reported that sales of existing homes had hit a record pace in March, despite slightly higher mortgage rates than in February. Sales had also been at a record pace in February.
The trade group now predicts that sales this year will surpass sales in each of the past two years, with a total of 4.35 million units sold, making 1998 the third record-setting year in a row.
New home sales did slow slightly in March, according to a Commerce Department report last week. They sold at a seasonally adjusted annual rate of 828,000 units, 5% below February's pace. For the first quarter as a whole, 219,000 new homes were sold, compared to 211,000 in the same period last year.
Nor does a substantial slowdown appear to be imminent. The level of mortgage applications has remained strong so far this year. That suggests that existing home sales should remain strong through the next quarter, said economist Mark Zandi of Regional Financial Associates, West Chester, Pa.
Mortgage applications are consistent with a sales pace of 4.5 million units, less than March's astounding pace of 4.89 million units, but still very strong, Mr. Zandi said.
The market's strength has surprised economists. Sales have been so strong for two years, thanks to low mortgage rates and high employment, that they had expected activity to slow this year.
The underlying demographics certainly argue against a market that keeps gathering steam. The pool of first-time buyers, who have made up close to half the market at certain times, is smaller than it was in the 1970s when baby boomers bought their first homes.
The generation now entering its 20's is much smaller and its members are taking longer to form households and buy homes.
Boomers were thought to have done the bulk of their trade-up buying by now, too.
But economists say several factors have helped home sales remain strong.
For one, wages are accelerating even as interest rates rise, said economist Diane Swonk of First Chicago NBD. That keeps homeownership affordable and consumers bullish.
The National Association of Realtors' affordability index is now close to the levels of the early 1970s when home prices and mortgage rates were both relatively low. In March the index stood at 134, which means that a typical family had 34% more income than it needed to qualify for a median- priced house at prevailing mortgage rates.
Moreover, there is a lot of credit sloshing around, Ms. Swonk said. "Everything from Community Reinvestment Act requirements to excess capacity have fundamentally altered the affordability of the housing," she said. One example: the proliferation of mortgages that require as little as zero to 5% of home value in down payment.
And baby boomers, enriched by gains in the stock market, have traded up into bigger homes. Not only that, but a growing number are buying second homes, said David A. Wyss, chief economist at Standard & Poor's DRI in Lexington, Mass.
More and more wealthy Chicagoans, for example, are buying second homes on the western coast of Michigan, a two-hour drive from the city. Ms. Swonk said midwestern retirees, who were expected to sell their cold-weather homesteads and move south, are electing to summer in the Midwest-and buy a second home in Arizona or Florida.