Drop in Housing Starts, Sales Is Predicted

U.S. housing starts and home sales should fall short of 2004’s record pace, but only slightly, as tame inflation helps sustain low long-term mortgage rates in 2005, Freddie Mac economists said.

Frank Nothaft, chief economist at the No. 2 U.S. mortgage funder, said housing starts should decline this year by 1% to 2% while 30-year mortgage rates are seen increasing by no more than half a percentage point.