Despite August Decline, U.S. Existing Home Sales Headed For Record

By John S. McClenahen Sales of existing homes in the U.S. fell 1.7% in August to a seasonally adjusted annual rate of 5.28 million units, says the Chicago-based National Association of Realtors (NAR). July sales were at a revised rate of 5.37 million units, and economists generally expected sales of existing homes to rise to a 5.4 million-unit rate in August. In August 2001 sales of existing homes were at an annual rate of 5.49 million, 3.8% higher than this past August's rate. "Even with a decline in August, we've had tremendous sales this year, and the level of existing-home sales activity remains historically strong," says David Lereah, NAR's chief economist. Indeed, NAR is forecasting a record 5.44 million existing-home sales in 2002. "The housing sector remains healthy despite financial-market turmoil, [a] weakening labor market and geopolitical uncertainty," says Stan Shipley, a senior economist at Merrill Lynch & Co., New York. "We believe the housing market will remain healthy going forward, as low interest rates entice homebuyers and offset uncertainty."

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