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STRONG DEMAND DRIVES UP FOURTH-QUARTER HOME PRICES, ACCORDING TO NAR

 WASHINGTON, Feb. 8 /PRNewswire/ -- Home prices rose steadily throughout many metropolitan areas during the final quarter of 1993, as extremely low mortgage rates continued to push up housing demand, according to the National Association of Realtors (NAR).
 Strong price increases were posted in the Northwest, Midwest and South, while some notable gains occurred in the Northeast.
 According to NAR President Robert H. Elrod, the healthy price increases that occurred in the housing market late last year were attributable to the heavy volume of purchases by first-time buyers and those trading up. "All the factors are there -- low rates, an improving economy, an ample supply of housing and willing consumers," he said. "The timing has been perfect for both buyers and sellers."
 The association's metropolitan home price survey showed that 15 areas, most of which were relatively lower-priced, recorded double- digit price gains between the fourth quarter of 1992 and the fourth quarter of 1993. The Richland/Kennewick/Pasco counties of Washington, with a median price of $108,800, recorded the largest price increase, at 17.6 percent. Salt Lake City, at $89,200, had the second highest increase, which was 14.5 percent. Green Bay, Wis., with a price of $83,100, ranked third, with an increase of 13.2 percent.
 The report covered median prices for single-family detached and attached existing homes in 131 metropolitan statistical areas(A). Prices in the fourth quarter ranged from $360,000 in Honolulu to $52,500 in Cedar Falls, Iowa. A median price is the midpoint in the price range; half the homes sell for more and half sell for less.
 Persistently low mortgage rates throughout the fourth quarter -- the lowest in more than 20 years -- opened up the housing market to more buyers in a lower income range. According to the Federal Home Loan Mortgage Corp. (NYSE: FRE), the average commitment rate for fixed-rate, 30-year conventional mortgages was 7.05 percent during the fourth quarter, more than one full percentage point below that of a year ago.
 In spite of the Federal Reserve Board's recent move to raise the discount rate, mortgage interest rates will stay very attractive, said NAR's Chief Economist John A. Tuccillo. "Although the Fed's action was stronger than we expected, our forecast for the first quarter anticipated the rate increase," he said. "Ultimately, we think this will have a calming effect on long-term rates, because it signals the Fed's resolve to fight inflation."
 The national median price for the fourth quarter was $106,900, which was 3.4 percent higher than the fourth quarter of 1992. Seventy-eight areas posted price gains exceeding or equaling the national price increase.
 The Midwest, the region with the largest concentration of affordable homes, continues to have the strongest overall residential real estate market, according to Tuccillo. Six cities in the region posted double- digit appreciation between the fourth quarter of 1992 and the fourth quarter of 1993. In addition to Green Bay, other Midwest cities posting high price increases included Madison, Wis., where the median price of $111,000 rose 12.6 percent from the fourth quarter of 1992. In Milwaukee, the median price of $107,900 rose 11.0 percent; and in Canton, Ohio, the price of $78,200 rose 10.6 percent. For the Midwest as a whole, the fourth-quarter median price was $85,400, rising 4.0 percent from one year earlier. "The economic rally makes continued, steady growth in the Midwest virtually certain," Tuccillo said.
 Several areas throughout the South experienced strong price increases. Leading the region was Amarillo, Texas, where the median price of $65,300 rose 12.6 percent. The median price of $71,300 for the Biloxi-Gulfport area of Mississippi rose 10.9 percent. Both Springfield, Mo., at $70,000, and Bradenton, Fla., at $87,400, recorded increases of 9.5 percent. Like the Midwest, the South has a large supply of housing priced within reach of the people who live there, Tuccillo noted. For the region as a whole, the median price for the fourth quarter of 1993 was $95,400, which rose 3.6 percent from the same quarter one year earlier.
 The West contained seven areas posting double-digit appreciation between the final quarter of 1992 and the final quarter of 1993. In addition to Richland/Kennewick/Pasco and Salt Lake City, Denver posted a 13.2 percent increase for its median price, which was $109,000. In Reno, Nev., the price of $131,300 rose 12.1 percent. The cities incurring the strong increases continue to be the less expensive ones, by that region's standards, Tuccillo noted. "High demand in the lower- priced markets has really bumped up prices," he said. For the West as a whole, the fourth-quarter price was $142,400, which was 0.8 percent above the fourth quarter of 1992. Marginal changes in the median prices for most of the California markets held down the median price for the region.
 The Northeast contained several pockets of healthy appreciation. In Pittsburgh, the median price of $82,400 rose 5.2 percent between the fourth quarter of 1992 and the fourth quarter of 1993; and in Atlantic City, the price of $109,700 rose 5.1 percent. The region's overall price for the fourth quarter was $138,500, which was 1.7 percent above that for the fourth quarter of 1992.
 For the year as a whole, the national median price for existing single-family homes was $106,600, rising 3.0 percent from 1992. Currently, NAR is predicting the national price will rise 3.6 percent this year to $110,400.
 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) All areas surveyed are metropolitan statistical areas (MSAs) as defined by the U.S. Office of Management and Budget. They include the specified city and surrounding suburban areas.
 (B) Provided by the California Association of Realtors.
 -0- 2/8/94
 /CONTACT: Trisha Morris, 202-383-7560, or Walt Molony, 202-383-1177, both of the National Association of Realtors/
 (FRE)


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

IH-DC -- DC002 -- 1836 02/08/94 08:47 EST
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Date:Feb 8, 1994
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