Housing Holds Up

ByJohn S. McClenahen There's just no other way to put it: The housing sector of the U.S. economy had a terrific 2002. Sales of existing homes increased 5.2% during December of last year to a seasonally adjusted annual rate of 5.86 million units, according to the Chicago-based National Association of Realtors (NAR). For the full year 2002, existing-home sales totaled 5.563 million, easily erasing the previous annual record of 5.296 million in 2001. Low mortgage interest rates are the primary force behind housing's stunning performance, says David Lereah, NAR's chief economist. However, "strong demand by first-time home buyers, fueled by the children of the baby boom generation and by immigration, along with a generally good job market and growing families trading up to larger homes, also has been contributing to record home sales activity," adds Lereah. The outlook for 2003? "With favorable affordability conditions and an improving economy, home sales are projected to remain strong in 2003 and should come fairly close to record levels," says Cathy Whatley, NAR's president.