Busting the budget caps would send a signal to the financial markets that Congress isn’t serious about fiscal discipline. That would send bond prices dropping and interest rates rising. Real estate activity would be choked off.

Low interest rates are here to stay. That will sustain the real estate sector, which will in turn keep the economy growing. Lower rates will increase the demand for housing and make commercial deals more attractive. Yet, there are still worries.

The factors that made 1997 one of the best years for real estate in U.S. history will continue to influence the economy next year, say industry economists.

If the economists are correct, real estate practitioners can look forward to a strong housing market through the turn of the century. With moderate interest rates predicted along with steady economic growth and low inflation, first-time homebuyers and move-up purchasers will spur a generous amount of activity from 1997 through the year 2000.

Fifty percent of Americans who responded to a recent Associated Press poll said they oppose a flat tax that would "take away all or most deductions, including the home mortgage interest deduction," lending support to NAR's position that the benefits of a pure flat tax aren't worth the loss of the mortgage interest deduction.