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WASHINGTON – If the housing market ends the year as the National Association of Realtors predicts, then rising home prices and mortgage rates will not have cooled home sales too much. Looking to the end of 2005, NAR predicts home sales to trend down from record levels in the second half of the year but easily set annual records for both new and existing home sales. NAR Chief Economist David Lereah said home sales should be “fairly stable in the near term.” He observed that, “The housing market is probably close to a peak right now in terms of sales activity, but there is tremendous momentum. Sales are expected to coast at historically high levels into next year, but they will trend slightly downward.” NAR forecasts existing home sales will increase 2.9% to 6.98 million for 2005, and new home sales will rise 4.8% to 1.26 million this year. In addition, the national median existing home price for all housing types is predicted will rise 10.5% in 2005 to $204,600. The 30-year fixed-rate mortgage is projected to rise to 6.2% in the fourth quarter and reach 6.6% by the end of 2006. NAR President Al Mansell said a tight supply of homes for sale will push the national median existing home price to rise at a “double-digit rate, which will be the strongest rate of price growth in 25 years.” -

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