WASHINGTON, DC-According to the National Association of Realtors, the outlook for 2001 is good even with the economy slowing and continued strength in the housing market. Dr. David Lereah, NAR’s chief economist, says the Federal Reserve accomplished its goals in slowing the economy through its series of interest rate hikes.

“We do expect a soft landing, however, the yellow caution flag is up and we need to keep a close eye on the indicators,” he says. “In fact, the Fed may have to cut interest rates to avoid a hard landing.”

Higher energy prices and increased volatility in the stock market, with major corrections in technology stocks, have raised concerns, Lereah says. Further slowing is evident with easing indicators, such as durable goods, consumer confidence and car sales. Even with stock losses in 2000, most people remain in good shape because of a tremendous building of wealth during the last five years.

Housing continues to be one of the most stable sectors of the economy. According to NAR figures, existing home sales will be off 4% this year. Next year’s sales should be fairly stable, declining 1.1%, Lereah says. NAR expects a resale volume of 4.99 million sales this year, with 4.94 million forecast for 2001. New-home sales are expected to slip only 1.7% this year to 892,000 units, with 2001 projected at 861,000 units, a decline of 3.4% from this year. Housing starts are forecast to decline 4.8% percent to a total of 1.59 million units this year, then slip 3.8% to 1.53 million in 2001.

NAR expects the national median existing-home price for 2000 as a whole to be $138,900, an increase of 4.4% over last year, then rise 5.5% in 2001 to $146,500. The typical new home price is expected to be $166,300 this year, up 4.3% from 1999, then rise 5.6% in 2001 to $175,700.

The association also projects 30-year fixed mortgage interest rates to decline slightly from just under 7.8% currently to about 7.5% by the end of 2001.

Want to continue reading?
Become a Free ALM Digital Reader.

Once you are an ALM digital member, you’ll receive:

  • Unlimited access to GlobeSt and other free ALM publications
  • Access to 15 years of GlobeSt archives
  • Your choice of GlobeSt digital newsletters and over 70 others from popular sister publications
  • 1 free article* every 30 days across the ALM subscription network
  • Exclusive discounts on ALM events and publications

*May exclude premium content
Already have an account?


© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.



Join GlobeSt

Don't miss crucial news and insights you need to make informed commercial real estate decisions. Join GlobeSt.com now!

  • Free unlimited access to GlobeSt.com's trusted and independent team of experts who provide commercial real estate owners, investors, developers, brokers and finance professionals with comprehensive coverage, analysis and best practices necessary to innovate and build business.
  • Exclusive discounts on ALM and GlobeSt events.
  • Access to other award-winning ALM websites including ThinkAdvisor.com and Law.com.

Already have an account? Sign In Now
Join GlobeSt

Copyright © 2024 ALM Global, LLC. All Rights Reserved.