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Hurricanes Spur Building

The forecast for sales of existing homes is improving as the year progresses, fueled lately by added demand stemming from the impact of recent hurricanes, the National Association of Realtors reported.

David Lereah, chief economist of the home-sellers' group, said that at the beginning of the year, it was thought 2005 would generate the second-highest total for both existing and new-home sales. But now, he said, another record year is in the works.

“Post Katrina, our sales projections for this year have moved even higher. Short-term momentum is very strong, and our Pending Home Sales Index just set a record. In addition to the housing needs of hurricane victims, we may be seeing some 'fence jumping' from home buyers who are getting into the market before interest rates move higher,” he said.

Existing home sales are now forecast to rise 4.2 percent in 2005 to a level of 7.07 million units. New home sales are expected to rise at an even faster pace of 7.1 percent, to 1.29 million units.

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