WASHINGTON The sustained decline in mortgage rates will propel increases in all the major housing indicators this year, the National Association of Realtors said.
The 30-year fixed-mortgage interest rate will average 6.9%, against 8.1% in 2000, said David Lereah, the groups chief economist.
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, Mr. Lereah said.
In other words, people with good jobs are looking at very good housing-affordability conditions in most of the country theyre getting into the market and are helping to stimulate economic growth, he said.
Though the economy still shows some weakness, Mr. Lereah said he expects existing-home sales to rise 1.6% this year, to 5.19 million units, and new-home sales to rise 2%, to 921,000 units.
The Realtor group predicts housing starts will rise 1.8% to a total of 1.62 million units this year, matching a construction pace not seen since 1987.
It also said it expects the national median existing-home price to rise 4%, to $144,600, and the median new-home price to be $173,900, which would be a 4.6% increase compared with 2000.