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Real estate agents see slight sales dip

Real estate agents see slight sales dip
Mon May 9, 2005 01:37 PM ET

WASHINGTON (Reuters) - A U.S. real estate agents' trade group on Monday forecast sales of existing homes this year to ease only slightly from the 2004 record high 6.784 million units.

The National Association of Realtors said higher oil prices are having a dampening effect on economic growth, and as a result long-term interest rates will only rise modestly.

The Realtors said it expects 6.700 million existing home sales this year, down 1.2 percent from the year before. New home sales should decline by 2.5 percent to 1.17 million, also just under the record high set in 2004, the Realtors said.

"The essentially sideways movement in mortgage interest rates recently has defied the consensus of earlier forecasts, with only a modest uptrend detectable over time," said NAR Chief Economist David Lereah. "The simple effect, in an economy with an improved labor market, is a higher demand for homes."

The Realtors do not expect rates for the popular 30-year fixed-rate mortgage to go higher than 6.4 percent in 2005 from the current level of 5.75 percent. Mortgage interest rates have been falling over the last five weeks.

The real estate agents expect median existing-home prices to rise 7.1 percent this year to $198,400 from the 2004 median of $185,200.

The group forecast the new home median price to climb 5.1 percent to $232,200.


LINK: http://www.reuters.com/newsArticle.jhtml;jsessionid=RRMHYTBAPPOAQCRBAEOCFEY?type=businessNews&st...