David Lereah, NAR's chief economist, described the report as ironic. ``Like everything else, this bright spot in the American economy has been eclipsed by the events of September 11,'' he said. ``After setting a new record for existing-home sales in August, our internal tracking shows a downturn following the attack on America, and there will be some natural pullback from big ticket purchases in the months ahead given uncertainty over the future,'' he added.
NAR now expects home resale activity to average below the 5.0-million unit rate through the first quarter of 2002. ``However, the negative effect should be temporary because the fundamentals of the U.S. economy remain favorable, and we should experience a delayed rebound. Assuming we're successful in preventing additional attacks, the rebound will be postponed until next year as we work toward market stabilization,'' Lereah explained.
NAR President Richard A. Mendenhall said one positive factor in the current market is the low level of interest rates. ``We now expect mortgage interest rates to move even lower to about 6.7 percent in the fourth quarter, which basically would match a record low,'' he said. Lereah said there are many factors pointing toward a housing upswing next year. ``In addition to very low interest rates, we continue to experience strong household formation, which is fueling the entry-level market. Once we work through the impact of job cuts and the economy stabilizes, we should see a very nice rebound in both housing and the general economy,'' he said.