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Healthy pattern continues in sales of existing homes

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Sales of existing single-family homes rose slightly in October after declining in September, a pattern that is likely to continue in the months ahead, according to the National Association of Realtors.

The seasonally adjusted annual rate of existing-home sales rose 2.1 percent in October to 4.79 million units from 4.69 million units in September, inching back upward toward the record pace of 4.91 million units set in July. Last month's resale level was 9.4 percent above the 4.38-million unit rate recorded in October 1997, according to a release from the National Association of Realtors.

NAR President Sharon A. Millett said the pattern of dips and rises in existing-home sales during the past several months is not surprising.

"This pattern is a healthy one, and in general, it reflects a balanced market for both buyers and sellers," Millett said in the release.

"We expect to close out 1998 at a record-setting level. The lowest mortgage interest rates in more than three decades, greater financial opportunities such as higher Federal Housing Administration (FHA) loan limits and an increase in the number of financing products available to consumers today, will continue to drive first-time buyers into the market, allowing many trade-up buyers to make their move," Millett added.

The association is projecting 4.75 million existing-home sales for 1998, which would be a 12.6 percent increase over the record of 4.22 million sales posted last year.

The national median existing-home price was $130,900 in October, up 5.2 percent from October 1997, when the median price was $124,400.

According to the Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 6.71 percent in October, compared to 7.29 percent in October 1997.

NAR Consulting Economist John Tuccillo noted that adjustments in the existing-home sales market especially can be seen in the Northeast and the West, which both experienced slight dips in the sales of existing homes in October, compared to the previous month.

"Both of these regions actually have been consistently regaining their health over the past few months. This latest slip in existing-home sales for these markets last month is really very minor," Tuccillo said in the release.

"Overall, the housing market is on a stable, straight track toward record levels again this year. The market we are looking at right now is probably going to remain the same through at least the early part of 1999," he added.

The National Association of Realtors, "The Voice for Real Estate," is the nation's largest professional association, representing nearly 720,000 members involved in all aspects of the real estate industry.

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