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Housing market setting records: NAR

January 9, 2002
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With housing outperforming the expectations of many analysts over the last year, both existing and new-home markets will set records for 2001 and near-record activity is expected to continue in 2002, according to the National Association of Realtors.

WASHINGTON -- With housing outperforming the expectations of many analysts over the last year, both existing and new-home markets will set records for 2001 and near-record activity is expected to continue in 2002, according to the National Association of Realtors (www.nar.realtor.com).

"With the exception of the uncertainty cast by the fallout of Sept. 11, our outlook for the housing market grew brighter as the year progressed,' said Dr. David Lereah, NAR's chief economist. "When we get the December data later this month, we expect to see total existing-home sales for 2001 to be 5.25 million, up 2.5 percent from 2000 and surpassing the previous record of 5.21 million set in 1999."

He said he expected total sales to be fairly even this year, and projeccted existing-home sales to reach 5.23 million in 2002, down a "negligible" 0.5 percent.

NAR also forecasts new-home sales will slip 3.2 percent this year to 874,000 units after a 2.5 percent rise to 902,000 units 2001, surpassing the previous record of 885,000 set in 1998. Housing starts are also expected to climb 1.7 percent to 1.60 million units for 2001, and then decline by 4 percent this year to 1.54 million.

Lereah expects U.S. economic growth, as measured by the Gross Domestic Product (GDP), to rise to a positive 1.9 percent growth rate in the second quarter. "Much of our economic activity is being sustained by the strong housing market, which will lead us out of the shallow recession which began last spring," Lereah said. Consumer price inflation for 2002 should be only 1.8 percent.

The association projects the unemployment rate to rise to 6.1 percent before it eases in the fourth quarter. Inflation-adjusted disposable personal income is forecast to grow 2.1 percent this year.

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