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

DATE: TUESDAY, June 27, 1995                   TAG: 9506270048
SECTION: BUSINESS                    PAGE: B-5   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Short

HOUSING MARKET REBOUNDS IN MAY

The lowest mortgage rates in more than a year pulled prospective home buyers back into the market in May. Existing-home sales rebounded by 4.7 percent from the lowest level in nearly three years.

``Rates have come down significantly,'' noted economist David Lereah of the Mortgage Bankers Association, who said rising mortgage applications hinted at improved sales in June as well. ``I think we've hit bottom and are on our way back up.''

But Lereah and other economists acknowledged that the slowing economy will keep the sales level below last year's 3.95 million, even with lower rates. The National Association of Realtors predicts sales of 3.65 million this year.

In May, sales totaled a seasonally adjusted 3.55 million annual rate, the Realtors reported Monday. That was up from 3.39 million in April, when they dropped 6.4 percent to the lowest level since a 3.36 million rate in June 1992.

Lereah said the increased sales of existing homes should help spark renewed construction of new homes. That building has been sluggish in recent months because of large inventories.

Surveys by the National Association of Home Builders have found shopping traffic by prospective buyers rising in recent months as mortgage rates fell and made housing more affordable.

Thirty-year, fixed-rate mortgages averaged 7.91 percent in May, down from 8.32 percent a month earlier and 9.15 percent in January. It was the lowest monthly average since rates stood at 7.15 percent in February 1994.

by CNB