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

DATE: SATURDAY, July 31, 1993                   TAG: 9307310050
SECTION: BUSINESS                    PAGE: A-6   EDITION: METRO 
SOURCE: 
DATELINE: WASHINGTON                                LENGTH: Medium

NEW-HOME SALES SURGE

Sales rose in every region of the nation except the West. They shot up 33.6 percent in the South, to a 318,000 rate, the highest since a 324,000 rate in June 1986.

"This clearly reflects a 22-year low in mortgage rates, coupled with some gain in the economy, some gain in people's confidence in their jobs," said Warren Lasko, executive vice president of the Mortgage Bankers Association.

The departments of Commerce and of Housing and Urban Development said Friday that sales of new homes totaled a seasonally adjusted annual rate of 678,000, bouncing back from a revised 12.5 percent plunge in May. It was the second-highest rate since a 687,000 rate in October 1989. Sales rose to 698,000 in April.

The Federal Home Loan Mortgage Corp. said 30-year, fixed-rate mortgages averaged 7.42 percent in June, down from 7.47 percent in May. And the median price of a new home dipped to $122,300, from $129,000 in May and $124,500 in June 1992.

Economist David F. Seiders of the National Association of Home Builders said the new-home sector is a buyers' market, prompting some builders to offer incentives such as help with closing costs, point-shaving, or mortgage add-on fees.

"Also, there's a lot of price negotiation, which is something you don't always see in the new-home market," he added.

The seasonally adjusted estimate of new houses for sale at the end of June was 278,000, representing a supply of 5.1 months at the current sales rate. - Associated Press