U.S. Realtors see
rising home prices,
sales for 2001

Hawaii to have record volume,
lower prices, says national group

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By Kathleen M. Howley
Bloomberg News

Washington >> Sales of existing U.S. homes, spurred by falling mortgage rates, will rise in 35 U.S. states this year, and prices will increase in 110 of 113 metropolitan areas, the National Association of Realtors said.

The tourist states of Florida, Nevada and Hawaii will have record sales volume this year despite the drop in visitor activity, according to the association.

"Some deceleration is expected for the remainder of the year in the wake of the September 11 attacks, but sales remain historically strong," David Lereah, the Washington-based trade group's chief economist, said in a statement.

Nevada will post the largest increase in homes sold, a 25 percent rise, compared to last year, followed by Alaska, up 23 percent, and New Mexico, up 21 percent.

Sacramento, Calif., will post the biggest price increase, an 18 percent rise to $170,200, followed by a 12 percent gain in Washington. The area around South Bend and Mishawaka, Ind., will also have about a 12 percent increase.

In two metropolitan areas prices will drop -- Honolulu, down 1.8 percent, and Hartford, Connecticut, down 0.3 percent. Prices in Springfield, Illinois, are expected to be unchanged.

The housing market is benefiting from a drop in interest rates even as economic growth slows. Rates on a 30-year mortgage have averaged 7.01 percent this year, down from 8.05 percent in 2000, according to Freddie Mac, the No. 2 mortgage buyer.

The National Association of Realtors said last month it expected home sales to rise 1.3 percent this year and prices to increase 5.8 percent, compared with a 4.3 percent gain in 2000.