Mortgage interest rates have dropped to 9.5 percent in some parts of the country and home prices also are falling, which usually would lead to a surge in sales.

But the buyers still aren't there, according to HSH Associates, a mortgage information service that surveys 2,000 lenders nationally each week."Everyone is concerned about the economy - especially the economy of their checkbook," said Paul Havemann, vice president of HSH.

The period between Thanksgiving and Christmas is traditionally slow for real estate sales since many people are focused on the holidays. This year, with widespread expectations of a recession and the possibility of a shooting war in the Persian Gulf early next year, the buyers are fewer than ever.

For those who are in the market, however, both mortgages and prices are attractive. HSH Associates found 500 lenders offering 30-year fixed-rate mortgages at 9.5 percent interest and the average among all the lenders surveyed down to 9.9 percent.

Housing prices also are down, according to the National Association of Realtors. The median home price nationally fell to $92,800 in October - the lowest it has been in a year.

Home sales fell in all parts of the country in October, compared with the number sold a year ago in October 1989 - down 23 percent in the Northeast, almost 20 percent in the West, 15.5 percent in the Midwest and 5.4 percent in the South.

With the economy so uncertain, many people are afraid to commit themselves to such a big purchase as a house. But others - looking for bargains - are simply waiting for the market to "bottom out."

Is now a good time to buy?

The answer depends on several factors:

- Your outlook

Economists don't expect interest rates to fall much further, but a recession might bring somewhat lower rates. On the other hand, if the United States gets into a war with Iraq, rates are likely to rise rapidly. Your guess on which way rates will go is probably as good as anyone else's.

Home prices have been falling, but the rate of decline varies greatly from city to city. Nationally, the Realtors say, the median price in October was still 23.4 percent higher than it was five years ago. There are doomsayers who expect prices to fall much, much more. The more widespread views is that any further declines will be moderate.

- Your financial circumstance

Young couples with rising incomes often find themselves paying a steep income tax. Home ownership provides the biggest tax shelter most of them can find. Those who already own a home and are ready to trade up are likely to find good buys but probably will get less than they want for their own home, if they can sell it at all. Right now is a dangerous time to buy a new house before you sell your old one.

- Where you live

Home prices tend to rise in areas that are expanding, when people move in to take the new jobs that come with growth. Prices remain stagnant in cities with little growth or with a slowly declining population. A boom followed by a bust is dangerous for home buyers; you may pay top dollar for a house during the boom and be forced to sell for less in the bust.

The following chart, put together by the Realtors, shows what has happened to the median home prices regionally in the past decade.


30p6 by 1.02"

ATEX: realcht


As you can see, home prices more than doubled during the decade in the Northeast and are up by 46 percent in the West. So even though prices are declining now, those who bought early in the decade are still well ahead. But those who bought at the high point a couple of years ago will lose money if they must sell now.

In the Midwest and the South, price rises have been more modest - up 32 percent for the decade in the Midwest and 29.5 percent in the South. A steep price decline is not considered likely in either area.