Roanoke Times
Copyright (c) 1995, Landmark Communications, Inc.
DATE: WEDNESDAY, November 3, 1993 TAG: 9311030015
SECTION: BUSINESS PAGE: B7 EDITION: METRO
SOURCE: Associated Press
DATELINE: WASHINGTON LENGTH: Medium
"It was a combination of mortgage rates and a pickup in the economy," said economist David Berson of the Federal National Mortgage Association, explaining that until recently, low rates have been offset by a slow job market.
"What had been holding the housing market back was not interest rates, but worries about job and income prospects," he said. "And, to the extent the pickup in economic growth corresponds to a somewhat stronger job market, it should translate into a stronger housing market."
The departments of Commerce and Housing and Urban Development reported Tuesday that new home sales totaled 762,000 at a seasonally adjusted annual rate, highest since a 784,000 rate in December 1986.
The 20.8 percent jump from August's revised 631,000 rate was the steepest since a 22.9 percent gain in September 1986.
All regions except the Northeast registered gains.
Analysts agreed the September sales level was not sustainable and could be revised downward in subsequent reports.
Economist David F. Seiders of the National Association of Home Builders said there appears to be a "big shift out of rental housing" as low mortgage rates make owning a home more affordable. He said it often costs less to buy than rent because mortgage interest is deductible from income taxes.
The median price of a new home was $129,000, up from $127,400 in August and $119,500 in September 1992.
The South posted the biggest sales increase, a 27.9 percent surge to a 367,000 rate.
by CNB