ROANOKE TIMES
Copyright (c) 1997, Roanoke Times
DATE: Friday, March 28, 1997 TAG: 9703280060
SECTION: BUSINESS PAGE: B-5 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: ASSOCIATED PRESS
Unseasonably warm weather, relatively low interest rates and a strong job market all contributed to the big gain.
There were signs of economic strength Thursday in the largest increase in existing home sales in more than a decade.
The home sales report for February from the National Association of Realtors showed a 9 percent increase in sales of existing single-family homes - the sharpest since April 1986. The level of sales, a seasonally adjusted annual rate of 4.26 million, came close to the all-time record of 4.28 million, set in May.
Unseasonably warm weather, relatively low interest rates and a strong job market all contributed to the big gain.
For all of 1996, existing home sales totaled 4.09 million, the best in 18 years. However, with interest rates rising, many analysts are expecting a more moderate - though still robust - sales rate this year.
``This year is coming in like a lion but we expect it to go out a little slower,'' said economist Paul Taylor of America's Community Bankers. ``If there's another [mortgage interest] rate hike and if employment growth slows down, and if you add a stock market correction to that, then clearly things will be slowing down.''
He expressed concern that the backlog of unsold homes was growing despite the strong sales rate. It jumped from 1.92 million in January to 2.22 million in February.
``Housing looks better than it has since the late 1980s,'' he said.
In the short term, recent rate increases could increase sales by drawing ``fence-sitters'' into the market - people who don't want to risk a further rise,'' said the Realtors' economist, John A. Tuccillo.
By region in February, sales soared 13.6 percent in the West, 10 percent in the Midwest, 8.6 percent in the Northeast and 5.5 percent in the South.
The median price of an existing home was $117,500 last month, up 3.1 percent from a year earlier. The median is the midpoint, meaning half of the homes sold for more and half for less.
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