Roanoke Times
                 Copyright (c) 1995, Landmark Communications, Inc.

DATE: WEDNESDAY, January 26, 1994                   TAG: 9401260400
SECTION: BUSINESS                    PAGE: B-7   EDITION: METRO  
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

HOUSING SALES, BUYERS' SPIRITS SOAR

Three reports Tuesday provided new evidence the economy was growing stronger at year's end, but not enough to push prices up significantly.

In January, consumer confidence in the economy returned to a high not seen in three years. And inflation pressure from labor costs completed a second year with record low increases.

Existing-home sales in 1993 jumped 7.9 percent to 3.80 million, the most since 3.83 million in 1979, according to the National Association of Realtors. That included a 6.7 percent advance in December, to a 4.49 million seasonally adjusted annual rate that broke the previous record of 4.21 million set a month earlier.

It was the fourth consecutive monthly gain, reflecting the strength in the housing sector as 1993 came to a close. Sales increased in all regions, both in December and during the year.

"Widespread perceptions that mortgage rates may have hit bottom clearly led to a spate of deals," said Bruce Steinberg, an economist with Merrill Lynch & Co. in New York.

Robert H. Elrod, the Realtors' president, said the sales increase indicates consumers are growing more and more convinced the economy is rebounding.

That view was reinforced Tuesday by a report from the Conference Board that its index measuring consumer confidence jumped 3.4 points in January to 83.2, highest since it hit 85.6 in September 1990.

But the optimistic news from the New York research group was muted by its survey finding that many consumers remained uncertain about employment prospects. More than a third said jobs were scarce.

The Labor Department reported Tuesday its Employment Cost Index rose 3.5 percent in 1993, matching 1992's record low and down from a 5.5 percent annual rate in early 1990. Labor costs are a key ingredient of higher prices.

Although wages and salaries rose 3.1 percent, fringe benefits such as health-care costs were held to a 4.6 percent increase - lowest in six years. In early 1990, benefit costs were rising at a rate of 7.5 percent.

The Realtors said the median price of a previously owned home was $106,900 last month, just 2.6 percent above the $104,200 price in December 1992. The median means half of the homes cost more and half cost less.

The biggest jump in sales occurred in the South, a 9.1 percent advance to 1.41 million homes that included a 6.5 percent gain in December, to a 1.63 million annual rate. The median price was $95,100, up from $92,100 in 1992.

\ Yearly home sales\ 1993 3.799 million\ 1992 3.520 million\ 1991 3.220 million\ 1990 3.211 million\ 1989 3.346 million\ 1988 3.513 million\ 1987 3.536 million\ 1986 3.474 million\ 1985 3.134 million\ 1984 2.829 million\ 1983 2.697 million\ 1982 1.990 million\ Source: National Association of Realtors