U.S. home sales expected to dip

Sales of existing and new homes will drift downward from 2002’s record pace, ending the year at their second-best levels ever, according to the National Assn. of Realtors.

David Lereah, NAR’s chief economist, said that, with the war behind us, home sales should become fairly stable. Although buyers at the margins of qualifying for a loan may feel a pinch if the interest rate on 30-year fixed-rate mortgages rises to 6.3% by the end of the year, the higher rate will not significantly affect the overall market, he said.

The trade group is forecasting 5.53 million existing-home sales this year, down 0.7% from the record 5.57 million in 2002. New-home sales are expected to be down 1.8%, to 956,000 units, second only to last year’s 974,000.

Housing starts, however, at an estimated 1.72 million units in 2003, will be up 0.6% from last year.

The national median price for an existing-home is expected to rise 5.1% this year to $166,400, while the median new-home price will be up 3.2% to $193,500, the NAR predicts.