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HOME SALES CONTINUE TO RISE AS FIRST-TIME BUYERS ENTER THE MARKET

 HOME SALES CONTINUE TO RISE AS FIRST-TIME BUYERS
 ENTER THE MARKET
 WASHINGTON, Aug. 25 /PRNewswire/ -- Sales of previously owned homes jumped in July, as low mortgage interest rates continued to draw first-time buyers to the market, according to the National Association of Realtors.
 The association recorded a seasonally adjusted annual sales rate(A) of 3.48 million existing single-family homes in July, up 6.7 percent from July 1991, when the resale rate was 3.26 million units.
 NAR President Dorcas T. Helfant said the heavy activity was due in part to a surge of purchases by first-time home buyers, who were taking advantage of the lowest mortgage rates in 19 years. "Many people are finding that they could be making mortgage payments that are lower than their rental payments. It's an easy choice -- to either build up equity with each mortgage payment, or keep throwing money out the window on rent," Helfant said.
 The Federal Home Loan Mortgage Corp. reported that the national average commitment rate for 30-year, conventional, fixed-rate mortgages was 8.13 percent in July, the lowest monthly average since July 1973, when the rate was 8.05 percent. In July 1991, the average rate was 9.58 percent. Mortgage rates this year have generally remained at least one percentage point lower than rates offered last year.
 Year-to-date sales continue to exceed those for last year. The association recorded a total of 2,030,000 existing-home sales between January and July, which was 5.8 percent higher than the total of 1,919,000 units for the first seven months of last year. "The market is ahead of where it was a year ago," Helfant noted. "It's looking more and more like the economy is getting back on its feet."
 The national median existing single-family home price for July was $102,600, slipping 0.8 percent from one year earlier, when the price was $103,400. The median is the midpoint in the price range -- half the homes sold cost more, half cost less. The heavy volume of first-time buyers purchasing less expensive homes resulted in the year-to-year drop in the national median price, said NAR Chief Economist John A. Tuccillo.
 "The combination of first-time buyers, starter home sales and low rates caused the median price to drop," Tuccillo said.
 Mortgage rates are expected to continue sliding in the months ahead, he noted. "We aren't going to see any sharp drops in rates, but they'll stay low enough to keep buyers revved up," Tuccillo said. Currently, NAR is predicting that the average rate for fixed-rate, 30-year mortgages will be 8.3 percent this year, compared to 9.2 percent for 1991.
 Three of the regions posted year-to-year increases in existing single-family home sales. In the Northeast, the pace for July was 540,000 units, up 5.9 percent from July 1991. "The rise in sales is an encouraging sign that the region's lackluster economy is turning around," Tuccillo said. The median price for existing single-family homes in the Northeast was $140,800 last month, down 1.9 percent from one year earlier. As with the national price, the Northeast median price was influenced by heavy activity at the lower end of the price scale.
 The resale rate in the Midwest was 970,000 units in July, soaring 19.8 percent from one year ago. "In the Midwest, buyers are coming out in droves, because housing there is among the most affordable in the nation," Tuccillo said. The median existing-home price in the Midwest was $81,500, up 2.9 percent from July 1991.
 The South posted a resale rate of 1.25 million units in July, up 5.0 percent from the July 1991 pace. The region's median price was $91,500 last month, down 1.6 percent from one year earlier.
 The West recorded an existing-home sales rate of 720,000 units in July, 4.0 percent below the rate for July 1991. According to Tuccillo, the drop in the sales pace can be attributed largely to slow activity in California, which is experiencing an economic slump. The median price in the West was $142,600 in July, dropping 5.0 percent from a year ago.
 Currently, NAR is predicting existing single-family home sales to total 3.49 million units this year, rising 8.3 percent from 1991, and reaching the highest level since 1988.
 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.
 (A) The annual rate for a particular month represents what the total number of actual sales for a year would be if the relative pace for that month were maintained for 12 consecutive months. Seasonally adjusted annual rates are used in reporting monthly data to factor out seasonal variations in resale activity. For example, home sales volume normally is higher in the summer and relatively light in the winter months, primarily because of differences in the weather.
 -0- 8/25/92
 /CONTACT: Trisha Morris, 202-383-7560; Liz Duncan 202-383-1043; or Scott Sherwood, 202-383-1016; all of the National Association of Realtors/ CO: National Association of Realtors ST: District of Columbia IN: SU: ECO


KD -- DC002 -- 2882 08/25/92 08:46 EDT
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Date:Aug 25, 1992
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