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Home Sales Heading For Soft Landing

WASHINGTON, Nov. 25 /PRNewswire/ -- Existing-home sales continued to ease in October after setting new records earlier this year, according to the National Association of Realtors.

Sales of existing single-family homes slipped 1.5 percent in October to a seasonally adjusted annual rate of 3.97 million; the pace is 2.5 percent below October of last year.

Russell K. Booth, NAR president, said it's important to put these numbers in perspective. "We set an all-time record sales rate in May of this year, with sales levels above the 4-million mark for seven consecutive months prior to October. This places us well on track to set a new resale record this year, surpassing the previous high of 3.99 million recorded in 1978," he said.

"If there's any surprise in all this, it's that sales stayed at such high levels for so long," Booth said. "Although we're coming off peak levels, we expect sales will stay at very healthy levels through 1997." NAR is projecting 4.09 million existing-home sales during 1996 and 3.84 million in 1997. "When the home resale pace is above 3.5 million, this stimulates other industries tied to housing, and that boosts the overall economy," he added.

The national median existing home price was $116,400 in October, 2.8 percent higher than the same time last year. The median is the midpoint in the price range, with half of the homes costing more and half costing less. "For 1996 as a whole, the median price is projected to be $117,900, an increase of 4.4 percent over 1995.

NAR Chief Economist John A. Tuccillo said the current market is showing a seasonal demographic shift, with a higher mix of singles and childless couples active in the market. "Every year since 1968 when NAR began keeping records, we've seen a drop in the median home price during the fall. Rather than a change in appreciation, what we're really seeing is the result of a higher ratio of people purchasing smaller, lower-priced homes. The majority of more expensive homes are purchased by families with children during the spring and summer months," he explained.

According to the Federal Home Loan Mortgage Corp., the national average commitment rate for 30-year conventional, fixed-rate mortgages in October was 7.92 percent, down from 8.23 percent in September.
 "This quarter-point drop is good, but because mortgage rates are so low in historic terms, shifts in rates aren't having the kind of impact we've traditionally seen," Tuccillo said. "This kind of drop helps people at the margins - especially first-time buyers trying to qualify for a loan."
 The West showed the best performance in October with existing-home sales rising 3.5 percent. The resale rate of 880,000 units was the same as October 1995. The median price was $149,100, up 0.9 percent from a year ago.
 The Northeast also saw an increase in resales, with the pace of 620,000 units in October increasing 3.3 percent from September, and 1.6 percent from a year ago. The typical Northeastern home cost $137,800 in October, up 2.8 percent from a year ago.

Midwestern existing-home sales slipped 1.0 percent in October to an annual rate of 1.02 million units, which is 3.8 percent below a year ago. The median resale price in the region was $98,000, up 2.9 percent from October 1995.

In the South, the resale pace dropped 5.8 percent in October to 1.45 million units, which is 4.6 percent below a year ago. The regional median price was $102,700, which is 4.7 percent higher than last October.
 The National Association of Realtors, "The Voice for Real Estate," is the nation's largest professional association, representing nearly 730,000 members involved in all aspects of the real estate industry.

* 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 is normally higher in the summer than in the winter, primarily because of differences in the weather. The actual number of sales in October was 359,000, compared to 323,000 in September and 354,000 in October of 1995.

NAR releases are also posted on the Internet at and

This and other news releases issued from the National Association of Realtors may be retrieved by calling the PRNewswire fax-on-demand service at: 1-800-758-5804, ext. 601633.

Existing Single-Family Home Sales for October 1996

Seasonally Adjusted Annual Rate
 Month U.S. N'east M'west South West
 Sept.r 4,030,000 600,000 1,030,000 1,540,000 850,000
 Oct.p 3,970,000 620,000 1,020,000 1,450,000 880,000

Median Sales Price of Existing Single-Family Home Sales for Oct. 1996
 Month U.S. N'east M'west South West
 Oct.p $116,400 $137,800 $98,000 $102,700 $149,100

SOURCE National Association of Realtors
 -0- 11/25/96

/CONTACT: Walter Molony, 202-383-1177, or Trisha Morris, 202-383-1016, both of the National Association of Realtors/

CO: National Association of Realtors ST: District of Columbia IN: FIN CST SU: ECO

ER -- DCM008 -- 3587 11/25/96 10:00 EST
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Publication:PR Newswire
Date:Nov 25, 1996
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