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NOVEMBER HOME SALES SWELL AS ECONOMY IMPROVES

 WASHINGTON, Dec. 29 /PRNewswire/ -- Sales of previously owned homes surged to the highest level in nearly six years, as a rise in interest rates prompted buyers to enter the market while economic conditions remain favorable, the National Association of Realtors reported today.
 The association reported a 19.2 percent leap in last month's seasonally adjusted annual sales rate(A) to 3.85 million existing single-family homes, compared to 3.23 million units in November 1991. In December 1986, the resale rate was 3.89 million units.
 NAR President William S. Chee noted how resale market conditions affected first-time home buyers. "Many decided to buy after seeing a spike in interest rates during a time of economic recovery. This release of pent-up demand shows consumers are closely watching the market to gauge the best time to buy," Chee said.
 Existing-home sales volume for the first 11 months of 1992 continued to exceed the volume for the first 11 months last year. The association recorded 3.22 million home resales from January to November this year, compared to 3.0 million units for the same period in 1991, an increase of 7.5 percent.
 The Federal Home Loan Mortgage Corp. reported that the national average commitment rate for 30-year, conventional, fixed-rate mortgages was 8.31 percent in November, compared to 8.09 percent the previous month. November's rate was the highest since June, when the rate was 8.51 percent, but registered lower than last November's rate of 8.71 percent.
 NAR's Chief Economist John A. Tuccillo emphasized that for growth to continue in the housing industry, a long-term outlook remains the best course a new administration could take. "Peaks in home sale activity should be seen in light of economic valleys the country has journeyed through recently. Overall growth remains encouraging, but the industry sees its continuance based on legislative incentives. Allowing the application of 401(k) funds or Individual Retirement Accounts to a down payment on a home would give more Americans an alternative to renting," Tuccillo said.
 The national median existing single-family home price for November was $102,900, a 5.1 percent increase from the same month in 1991, when the price was $97,900. The median is the midpoint in the price range -- half the homes sold cost more, half cost less. According to NAR Executive Vice President Almon R. "Bud" Smith, the uptick reflects steady growth in the overall economy.
 "As housing markets recover with the economy, bursts in resale activity will complement slight increases in home prices. These spurts of growth should send a signal that incentives for the growth of the housing industry can only lead to further economic improvement for related industries as well, and this cycle bodes well for the future of the country," Smith noted. NAR is forecasting sales of existing single-family sales to reach 3.44 million units in 1992, the best rate since 1988's level of 3.44 million units. For 1993, the association believes the resale pace will total 3.67 million existing single-family homes, a level not seen since 1979's rate of 3.83 million units.
 All regions of the nation posted year-to-year increases in existing single-family home sales. The Midwest led the nation for November, with a seasonally adjusted annual rate of 1.07 million units, a 24.4 percent jump from last November's home resales rate of 860,000 units. Last month's median sales price for existing single- family homes in the Midwest was $82,300, up 5.4 percent from last November's sales price of $78,100.
 The resale rate in the Northeast also posted a strong showing, with 560,000 units in November, a 21.7 percent rise over last November's rate of 460,000 units. The region's median sales price was $137,800 last month, down 0.4 percent from $138,300 last November.
 In the West, the resale rate registered at 820,000 units, an increase of 18.8 percent over last November's rate of 690,000 units. The West's median sales price for last month was $137,900, dipping 0.6 percent from last November's median resale price of $138,800.
 The South recorded a seasonally adjusted annual resale rate of 1.4 million units for November 1992, up from 1.23 million units in November 1991. The median sales price in the South rose 5.5 percent to $92,000 from $87,200 last November.
 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, primarily attributable to weather differences, in resale activity.
 -0- 12/29/92
 /CONTACT: Scott Sherwood, 202-383-1016, Walter Molony, 202-383-1177, or Trisha Morris, 202-383-7560, all of the National Association of Realtors/


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

KD -- DC001 -- 0259 12/29/92 08:54 EST
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Publication:PR Newswire
Date:Dec 29, 1992
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