WASHINGTON -- The resiliency of the housing market in a slowing U.S. economy, coupled with a sustained decline in mortgage interest rates, means housing should be stronger this year than earlier believed, according to the National Association of Realtors (NAR).

Dr. David Lereah, NAR's chief economist, said lower interest rates are keeping the housing sector strong. “With 30-year fixed mortgage interest rates a little under 7%, and expected to stay near this level for the balance of the year, we project existing-home sales to nearly match last year's performance,'' he said. “We now expect 5.07 million existing-home sales this year, off only 0.9% from 2000.

“That would make this the third highest year on record,'' Lereah added.

NAR forecasts new-home sales to rise 1.1% to a total of 920,000 units this year, while housing starts are forecast to slip 1.1% to 1.59 million units in 2001.

Lereah projects the 30-year fixed mortgage interest rate to average 6.9% throughout the year, down from 8.1% in 2000. We anticipate further cuts by the Federal Reserve -- in fact, the recent decline in mortgage interest rates results in part from lenders' anticipation of future reductions by the Fed,'' he said.

The association expects the national median existing-home price this year to be $144,800, an increase of 4.2% over 2000, while the typical new home price is expected to be $173,600 this year, up 4.5% from 2000.NAR projects U.S. economic growth, as measured by the Gross Domestic Product (GDP), to be 2.1% for 2001, rising from an annualized rate of 0.7% in the first quarter to 4.1% by the end of the year.