WASHINGTON – U.S. home sales are close to peaking but should hold historically high levels into next year, the National Association of Realtors' (search) top economist said Tuesday.
Chief Economist David Lereah, in a monthly forecast, nudged his estimates higher for sales of previously owned and new homes in 2005.
He said existing home sales (search) should rise 2.9 percent to 6.98 million this year, up from his previous forecast of 6.97 million and higher than the 2004 record of 6.78 million.
Sales of new homes should climb 4.8 percent to 1.26 million in 2005, which also would be a record high, the Realtors said.
Housing, now in a boom of more than four years, has defied economists' expectations for a slowdown this year as long-term mortgage rates (search) remain stubbornly low. That has led economists over the past two months to boost their 2005 targets and forecast another record year for sales and construction.
But fixed 30-year mortgage rates have begun to trend higher over the past five weeks, according to mortgage finance company Freddie Mac (FRE). Industry analysts also have begun to point to anecdotal evidence of slowing sales and rising inventory of homes available for sale in some of the priciest areas.
The Realtors said home sales should begin to ease off record levels during the second half of the year.
"The housing market is probably close to a peak right now in terms of sales activity, but there is tremendous momentum," he said.