As expected, the torrid sales pace of new and existing homes is beginning to slack off a bit, but there is almost no doubt that 1999 will end up in the record books as one of the best years ever.

The Commerce Department reports that sales of new homes dropped 5.1 percent in May to a seasonally adjusted annual rate of 888,000, slightly above the record 875,000 new homes sold last year. That sales pace is expected to continue to decline for the next few months.

A slowdown also was noted in existing sales, with May showing a decline of 4.0 percent to 5.04 million units from a pace of 5.25 million units recorded in April.

Both National Association of Realtors President Sharon Millett and Home Builders President Charlie Ruma said slips were expected.

Said Millett, "May was the second month off of the record recorded in March. We expected sales to slide a bit, but the pace is still very high and we anticipate another strong year." Added Ruma, "This is still a very healthy sales rate. New home sales spiked in April, perhaps because people jumped into the market to try to beat increasing mortgage rates, so this decline wasn't unexpected."

The national median existing-home sales price rose 3.3 percent in May to $133,100, compared to $128,900 recorded a year ago.

Interest rates drifting higher

The Federal Reserve reports that interest rates are continuing to edge up, hovering around 7.65 percent by the end of June, nearly a full percentage point above the 6.74 percent level reached earlier this year.

Housing leaders note that interest-sensitive housing sales have fallen in recent months, showing signs of an economic slowdown and reducing pressure for the Fed to raise interest rates to battle inflation.

Nevertheless, National Association of Realtors economist Jim Smith foresees interest rates declining again toward the end of the year to 6.0 to 6.5 percent range.

Immigration pushing housing demand

Harvard University's Joint Center for Housing Studies is out with its annual forecast of American housing, and is predicting 1.1 million new households will form every year for the next 10 years -- with nearly a quarter of them being formed by new immigrants.

Sixty-five percent of the increase is expected to come from the movement of the population into ages where households are headed by older, single individuals. The remainder of growth will be generated by increased single headed households caused by divorce rates, declining marriage rates and low re-marriage rates.

The study says baby boomers will drive homeownership rates and values up, and spend more on remodeling their properties.

"Echo boomers," the children of baby boomers, are expected to account for more than 1 in 10 owner households by 2010. Many of the "echo boomers" will be immigrants or second generation Americans.

Men at home

New York: A report by TIME Magazine shows that 59 percent of people with home offices are men, and most of them want to stay home to be close to their children.

According to the study, among the benefits of being a stay-at-home dad are:

• Children with dads who work from home are twice as likely to get A's on their report cards.
• Work at home dads drink less, with 13 percent admitting to have eight drinks per week, compared to 32 percent of fathers in traditional offices.
• Half of work at home dads play baseball with their kids. Twenty one percent of traditional working fathers say they prefer to watch video games with their children.
• 14 percent of home office dads claim to be within their target weight compared to 25 percent of fathers that work away from home who admit being overweight by 11 pounds or more.