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MODERATE GROWTH FORECAST FOR ECONOMY AND REAL ESTATE IN 1993

 HONOLULU, Nov. 25 ~PRNewswire~ -- Interest rates will fall below 8 percent, combine with renewed consumer confidence in the economy and generate moderate growth in 1993's housing market, according to forecasts presented during the National Association of Realtors' annual convention here last week.
 Expectations for the nation's economic performance next year, and its effect on real estate markets, were offered by James Smith, professor of finance at the University of North Carolina; Robert Van Order, chief economist of the Federal Home Loan Mortgage Corp.; John Tuccillo, NAR's chief economist; and David Lereah, chief economist of the Mortgage Bankers Association of America.
 The outlook session took place during the association's 85th Annual Convention and Trade Exposition. Nearly 20,000 Realtors and guests attended the Nov. 12-17 convention.
 Lereah stated that with low interest rates providing favorable conditions for housing, he was "cautiously optimistic" about the recovery. "The housing industry traditionally leads economic recovery. Recently, it has had modest gains, and so has the economy. For 1993, we anticipate housing will lead with a little more fervor," Lereah said.
 According to the Federal Home Loan Mortgage Corp., the average commitment rate for conventional, 30-year, fixed-rate mortgages has hovered at 8 percent during 1992. With the exception of Smith, all the economists predicted 30-year, fixed-rate mortgages to fall below 8 percent from current levels of approximately 8.5 percent.
 NAR's Tuccillo said the nation is "groping out of this recession much more slowly than we've left other recessions." He noted that restructuring of personal debt through mortgage refinancing and savings will lead potential home buyers to carefully re-enter housing markets.
 Tuccillo predicted that the economy's annual growth rate for the first three quarters of 1993 will reach 3.4 percent, compared with 2.7 percent for the first three quarters of this year. Also, he forecast sales of existing single-family homes to rise 4.3 percent to 3.563 million units, compared to an expectation of 3.417 million units for 1992.
 Van Order's outlook for housing and mortgage markets was similar to Tuccillo's growth projections, but he said next year would bring a greater availability of flexible mortgage options.
 The economists generally agreed that the end of the recent presidential election and its negative tone will remove consumer uncertainty over the economy and generate spending. However, they said high unemployment will continue to hinder an economic charge toward full recovery.
 Smith's overall view of the nation's future economic health was more optimistic. He characterized the economy as being "in a new expansion."
 "We're going to have growth this year of 2 percent. Next year should be around 3.8 percent," Smith said.
 He added that the Federal Reserve Board's commitment to eliminating inflation will determine the direction of economic recovery. "It doesn't matter what President Clinton does -- there's nothing he can do about the Fed."
 The National Association of Realtors, "The Voice for Real Estate," is the nation's largest trade association, representing nearly 750,000 members involved in all aspects of the real estate industry.
 -0- 11~25~92
 ~CONTACT: Trisha Morris, 202 383-7560, or Walter Molony, 202-383-1177, both of the National Association of Realtors~


CO: National Association of Realtors ST: Hawaii IN: SU: ECO

TW -- DC002 -- 1381 11~25~92 08:47 EST
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Publication:PR Newswire
Date:Nov 25, 1992
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