ROANOKE TIMES 

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

DATE: TUESDAY, March 5, 1991                   TAG: 9103050110
SECTION: BUSINESS                    PAGE: A-5   EDITION: METRO 
SOURCE: Associated Press
DATELINE: WASHINGTON                                LENGTH: Medium

HOME SALES AT 8 1/2-YEAR LOW/ BUT OPTIMISTIC BUYERS, BUILDERS SIGNAL BETTER

New-home sales plunged in January to their lowest level in 8 1/2 years, the government reported Monday, but analysts said buyers have become more active in recent weeks and a modest improvement is expected this year.

"January was a month of high anxiety," with spending curtailed across the economy because of concern over the Persian Gulf War and the recession, said Richard Peach, an economist with the Mortgage Bankers Association.

The Commerce Department and the Department of Housing and Urban Development said January sales fell 12.3 percent, to just 408,000 at a seasonally adjusted annual rate. That was the lowest level since 407,000 in August 1982.

"Housing activity stalled in the first half of the month as the clock ticked away" on the allied deadline for an Iraqi withdrawal from Kuwait, said David G. Seiders, an economist with the National Association of Home Builders. Since then, however, "we've been getting a lot of reports that things are looking pretty good," Seiders said, citing an increase in buyer traffic and more optimistic builder expectations.

Economist John A. Tuccillo of the National Association of Realtors agreed, saying, "Continuous reports of allied successes had eased consumer anxiety by late January and many markets reported a notable increase in home-buying traffic."

New-home sales have fallen for two years and in January were 35 percent below January 1990 sales.

At the end of the month, the seasonally adjusted estimate of new houses for sale totaled 316,000. That was a 9.3-month supply of unsold units, the highest level since a 9.4-month supply in April 1982.

Because builders tend to postpone construction when inventories are high, the report signaled the possibility of continued layoffs in the housing industry.

The Labor Department has reported the loss of 155,000 construction jobs in January, although it blamed some of the decrease on unusually bad weather. 


 by CNB