ROANOKE TIMES
Copyright (c) 1996, Roanoke Times
DATE: Tuesday, December 31, 1996 TAG: 9612310137
SECTION: BUSINESS PAGE: B-7 EDITION: METRO
DATELINE: WASHINGTON
SOURCE: Associated Press
Sales of existing homes appear headed for a new record in 1996, according to reports Monday that also suggest moderate economic growth in the new year.
``All in all, it's the way to end the year,'' said Robert Dederick, economic consultant for Northern Trust Co. in Chicago. ``The economy's on an uptrend, but not too steep a one. It keeps employment full, but inflation at bay.''
The National Association of Realtors reported sales of previously owned single-family homes rose 1.8 percent to 4.04 million at a seasonally adjusted annual rate.
The increase reversed a five-month string of declines, including a dip to a 3.97 million rate in October. Analysts had expected little change.
Still, except for October, sales have remained above the 4 million rate for eight straight months. The Realtors forecast 1996 sales will total 4.09 million, breaking the 3.99 million record set in 1978.
Meanwhile, the Conference Board reported separately in New York that the Index of Leading Indicators edged up 0.1 percent in November after remaining unchanged a month earlier. The index is designed to forecast economic activity six to nine months in advance.
November marked the 10th straight month without a decline, and analysts said the advance was new evidence of moderate growth with little inflation.
``It's the same old story,'' Dederick contended. ``The economy continues to plod along but that's what we want to see.''
Russell Booth, the Realtors president, said ``the housing market is in fine shape'' compared with the 3.72 million sales rate last January.
``Consumer confidence is strong once again, and this is resulting in heavy activity in markets coast to coast,'' he added. Indeed, sales were up in every region except for a 4.8 percent dip in the Northeast.
The government reports on November sales of new homes today, and many analysts expect a 3.6 percent increase to a 740,000 annual rate. If so, sales will have remained above the 700,000 rate for 10 months for the first time since the period ending September 1979.
The median price of an existing home in November was $117,400, up from $116,600 in October and $114,300 a year earlier. The median is the midpoint, meaning half of the homes cost more and half cost less.
The Realtors are projecting a $117,600 median price for 1996, a 4.2 percent increase from $112,900 in 1995.
The November leading index included revisions that replaced two components - sensitive materials prices and unfilled durable goods orders - with one measuring the difference between 10-year Treasury bond interest rates and the short-term federal funds rate.
LENGTH: Medium: 55 linesby CNB