NAR: Housing market taking a breather but staying strong

WASHINGTON -- May 10, 2006 -- The housing market is settling but should experience its third best year in 2006, with job creation and a growing economy offsetting some of the effects of rising interest rates, according to the National Association of Realtors® (NAR).

David Lereah, NAR’s chief economist, says the market is adjusting to higher mortgage interest rates. “Coming off a prolonged period of record sales, housing is taking something of a breather this year,” he says. “Even so, interest rates remain historically low, we’ve added about 2 million jobs over the last 12 months and the economy continues to grow -- that will sustain healthy levels of home sales in 2006, but they’ll stay below the peaks experienced during the last two years.”


Lereah forecasts the 30-year fixed-rate mortgage to rise to 7.0 percent this summer and hold at that level during the second half of the year. The unemployment rate is expected to average 4.7 percent, compared with 5.1 percent in 2005, while growth in the U.S. gross domestic product is seen at 3.5 percent in 2006, the same as last year.


http://www.planetrealtor.com/florida/news/daily/news.cfm?article=n1-05102006