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LOW INTEREST RATES KEEP SEPTEMBER HOME SALES ABOVE A YEAR AGO

 LOW INTEREST RATES KEEP SEPTEMBER HOME SALES ABOVE A YEAR AGO
 WASHINGTON, Oct. 26 /PRNewswire/ -- Existing-home sales in September benefited from the lowest interest rates since 1973, with home owner purchases rising over 5 percent compared to a year ago, according to the National Association of Realtors.
 The association reported a 5.1 percent increase in last month's seasonally adjusted annual sales rate(A) for existing single-family homes, compared to September 1991. The resale rate of 3.28 million units for last month contrasts with 3.12 million units recorded for the same time last year.
 NAR President Dorcas T. Helfant noted that despite historically low interest rates, some potential home buyers are reluctant to enter the market. "Even with very favorable home buying conditions, consumers are holding back due to the sluggish growth of the economy," she said. To stimulate further growth in home sales, government barriers to down payment flexibility need to be removed, according to Helfant. "A choice confronts President Bush -- a bill on his desk allows Americans to apply Individual Retirement Account funds toward a home purchase. If he signs, many doors could be opened for potential homebuyers. That's his decision."
 The Federal Home Loan Corp. reported that the national average commitment rate for 30-year, conventional, fixed-rate mortgages was 7.92 percent in September, the lowest monthly average since June, 1973, when the rate was 7.73 percent. In September, 1991, the rate was 9.01 percent. Mortgage rates this year have generally remained one point lower than rates offered last year.
 Existing-home sales volume for the first nine months of 1992 continue to exceed the volume for the same time period last year. The association recorded year-to-date sales of 2.62 million units for 1992, a 5.2 percent increase over last year's January-to-September total of 2.49 million units. "The housing industry is primed for resurgence, but its waiting for an economic boost," Helfant added.
 The national median existing single-family home price for September was $103,200, a 2.9 percent increase over the same month in 1991, when the price was $100,300. The median is the midpoint in the price range -- half the homes sold cost more, half cost less. According to NAR Chief Economist John A. Tuccillo, the small percentage price increase is a reflection of the skittish growth of the nation's economy.
 "The housing market continues to grow at a steady pace, but in reality, it needs a kickstart," noted Tuccillo. More changes in federal regulations are needed, according to Tuccillo, such as "the recent elimination of the Federal Housing Administration's restriction on the amount of closing costs that can be financed in FHA transactions. It makes a sensible difference for many potential home owners when FHA represents the only way to finance their purchase."
 Recent appropriations legislation for the U.S. Department of Housing and Urban Development, which oversees FHA, rescinded a 57 percent limitation on the amount of closing costs that could be financed with an FHA loan, as well as adjustments to the program's mortgage insurance limit.
 Three of the regions posted year-to-year increases in existing single-family home sales. The Northeast pace for September was 530,000 units, a 10.4 percent rise from the previous September. The median price for existing single-family homes in the Northeast was $137,000, down 0.5 percent from one year ago.
 In the Midwest, the resale rate was recorded at 870,000 units, 7.4 percent higher than the previous September rate of 810,000 units. The median existing-home price for the region was $81,300, up 6.4 percent from September, 1991's price of $76,400.
 The South saw a 6.1 percent home resales increase last month, with a rate of 1.21 million units, compared to 1.14 million units a year ago. The region's median existing-home price of $91,700 remained the same during September of 1991 and 1992.
 In the West, existing-home sales dropped 4.3 percent to 670,000 units during September 1992, compared with the same time last year. Additionally, median existing-home prices in the region edged up by 0.7 percent to $145,200, compared to last September's $144,200 price.
 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- 10/26/92
 /CONTACT: Scott Sherwood, 202-383-1016; Trisha Morris, 202-383-7560; or Walter Molony, 202-383-1177, all of the National Association of Realtors/ CO: National Association of Realtors ST: District of Columbia IN: SU: ECO


MH -- DC006 -- 4623 10/26/92 09:45 EST
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Date:Oct 26, 1992
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