Washington - Despite rising interest rates, and possibly even because of them, sales of existing single-family homes went up a bit last month, suggesting many Americans are still looking for quality housing and may be rushing to get into homes before rates go much higher.

The National Association of Realtors estimates about 4.75 million homes will be sold nationwide this year, a figure that is about 6.7 percent higher than forecast a month ago. The NAR believes the fact that sales improved despite increases in mortgage interest rates "demonstrates the very high demand for housing in the United States, and how important home ownership is in achieving the American Dream."

Nevertheless, NAR expects demand to stabilize for the next several months. The national median existing-home price was $131,100, up 2.3 percent from the same month a year ago, when the median price was $128,100.

Interest rates could go higher

Washington - Housing experts are cautioning Federal Reserve Chairman Alan Greenspan about nudging interest rates too high, saying the current robust economic climate cannot be sustained if consumers can no longer find affordable housing.

In past year, mortgage interest rates have gone from less than 7 percent to about 8 1/4 percent. The National Association of Home Builders is projecting at least one more quarter point boost this summer. According to Freddie Mac, the national average commitment rate for a 30-year, conventional, fixed-rate mortgage was 8.33 percent in February, up from 8.21 percent in January.

It was 6.81 percent in February 1999.Economists are expecting another quarter point tightening at the Fed meeting May 16, but believe the 8 1/2 percent rate will probably hold up for the most of the remainder of the year.

For more interest rate news, see the Realty Times Interest Rate Watch

Home builders see easing of demand

Washington - The Federal Reserve's efforts to slow the economy appear to be having some impact on the nation's housing, where sales of new homes are beginning to decline and - despite somewhat higher numbers - even the existing home market appears to have stabilized.

Single-family building permits, one of the key forecasters of the national economy, are beginning to decline, along with new homes sales.

Building permits for new single-family homes fell 7.7 percent last month and permits to build new multi-family homes dropped by 9 percent.

Home builders polled for their outlook over the next several months indicated the softening new homes market could be around for awhile, with the confidence index declining to 61, the lowest level since January 1998.

New buyers are bred on bytes

New Orleans - A marketing company that focuses on the needs of Generation X'ers - that home buyer group born between 1961 and 1981 - says homes that show they can accommodate upscale gadgetry are most likely to whet the appetite of this new, mainstream buyer.

Generational Marketing Corp. is recommending that home sellers showcase technology features in their homes, such as availability of phone jacks and cable outlets, as well as extra space that can be freed up for an at-home office.

The company says in the 1980s buyers were looking for large, formal living rooms; and in the 1990s the hot button was upscale bathrooms and kitchens. The current generation, however, is more techno driven, looking more for connectivity than square footage.

Gen X'ers "will demand special wiring for cables, phone lines and electrical outlets, clustered together properly," says the firm. "A home that appeals to an X'er welcomes the future."

Published: March 29, 2000

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