U.S. Existing-Home Sales Higher Than Expected

If the U.S. housing bubble is about to burst, it wasn't evident in the March existing-home sales data the Chicago-based National Association of Realtors released on April 25. Sales last month were at a seasonally adjusted annual rate of 6.89 million, up 1% from February's revised rate of 6.82 million. The March rate was the third highest on record and nicely above the 6.79 million rate economists generally expected.

But how long that level can be sustained is an open question. Existing-home sales are a lagging economic indicator. And the U.S. economy now appears to be softening, with, for example, Merrill Lynch & Co. revising downward its first-half 2005 real GDP growth forecast to just above a 3% annual rate and its second-half outlook to just under 3%.

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