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OCTOBER HOME SALES RISE TO HIGHEST LEVEL IN NEARLY FOUR YEARS

 WASHINGTON, Nov. 25 ~PRNewswire~ -- Sales of previously owned homes jumped in October to the highest level in more than three years, as buyers continued to take advantage of low mortgage rates, according to the National Association of Realtors.
 The association recorded a seasonally adjusted annual sales rate(A) of 3.60 million existing single-family homes in October, up 14.3 percent from October 1991, when the resale rate was 3.15 million units. The October rate was the highest since December of 1988, when the rate hit 3.76 million units.
 According to NAR President William S. Chee, the surge in October sales is an indication that consumers are regaining confidence in the economy, and as a result, are becoming more comfortable with taking on additional debt and making "big-ticket" purchases such as homes. "We're seeing more people entering the market at a time of the year when sales generally start to dwindle," Chee said. "Very likely, there is some pent-up demand that built up while buyers stayed on the sidelines." The increase in activity is due to purchases by both entry-level buyers and those trading up to larger homes, he noted.
 Last month's national median existing single-family home price was $104,100, which was 5.0 percent higher than one year earlier, when the price was $99,100. The median is the midpoint in the price range -- half the homes sold cost more, half cost less. Steady demand caused the year-to-year price increase, Chee noted.
 The Federal Home Loan Mortgage Corp. reported that the national average commitment rate for 30-year, conventional, fixed-rate mortgages was 8.09 percent in October, up slightly from 7.92 percent the previous month, but still very affordable.
 NAR Chief Economist John A. Tuccillo noted that the uptick in mortgage rates was due to uncertainty among mortgage investors over how the change in presidential administrations would affect the economy. Rates are expected to stay around the current level for the next several weeks, at least until the Clinton administration starts putting its economic growth plan in motion. Tuccillo explained that a short-run stimulus program is highly unlikely, due to the enormous size of the federal deficit.
 However, he said it is likely that some longer-term measures will be implemented, which will have the effect of raising economic growth, and thus, housing activity, in 1993.
 "Under this scenario, we may see interest rates slide down in the first half of next year," Tuccillo said. Currently, NAR is predicting that the average rate for fixed-rate, 30-year mortgages will be 8.3 percent in 1992 and 7.8 percent in 1993.
 Year-to-date sales continue to exceed those for last year. The association recorded a total of 2.935 million existing-home sales between January and October, which was 6.5 percent higher than the total of 2.755 million units for the same period last year.
 All of the regions posted year-to-year increases in existing single-family home sales. In the Northeast, the pace for October was 540,000 units, up 17.4 percent from October 1991. The median price for existing single-family homes in the Northeast was $135,500 last month, down 0.9 percent from one year earlier.
 The resale rate in the Midwest was 1.02 million units in October, which was up 21.4 percent from one year ago. The median existing- home price in the Midwest was $82,400, up 6.9 percent from October 1991.
 The South posted a resale rate of 1.30 million units in October, up 13.0 percent from the October 1991 pace. The region's median price was $92,300 last month, up 4.6 percent from one year earlier.
 The resale rate for the West was 740,000 units in October, 5.7 percent above that for October 1991. The median price in the West was $146,800 last month, up 0.1 percent from a year ago.
 NAR's latest economic outlook predicts that existing single- family home sales will total 3.42 million units this year, rising 6.1 percent from 1991, and reaching the highest level since 1988. Next year, resales are expected to rise to a total of 3.56 million units.
 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- 11~25~92
 ~CONTACT: Trisha Morris, 202-383-7560, Liz Duncan 202-383-1043, 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

TW -- DC001 -- 1380 11~25~92 08:47 EST
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Publication:PR Newswire
Date:Nov 25, 1992
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