WASHINGTON - U.S. home sales and housing construction will fall next year because of mortgage interest rates approaching 8%, the National Association of Realtors said.

Sales of existing homes will decline 5.1%, to 4.91 million units, from the record 5.18 million expected this year, James Smith, chief economist, said Tuesday in the association's annual economic forecast. Sales of new homes are expected to fall 4.9%, to 848,000, from this year's expected record of 928,000.

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