As the traditionally busy spring home-buying season heads into full bloom, expectations for rosier sales also are growing.
"We're getting anecdotal evidence from all over the country that buyers and serious lookers are back in force," said John Tuccillo, chief economist for the National Association of Realtors in Washington."It's hard to tell, though, if it is a spurt of pent-up demand or a trend."
Hard figures aren't available for the current season, but many Realtors, lenders and economists around the country are reporting a long-awaited pickup in housing-related business after months of sluggish demand.
"I think I've got better news to talk to you about today than I did six months ago," said Stephen Ashley, president of the Rochester, N.Y., mortgage banking company Sibley Corp.
Sibley's home mortgage applications have been running about 25 percent above last year's levels - a figure echoed by a number of other mortgage bankers - and Ashley said he expects activity to remain brisk through June.
Homebuyers have been lured by low interest rates, a large supply of homes and renewed consumer confidence following the successful conclusion of the Persian Gulf war.
"I think America feels pretty good about itself right now. I feel pretty good about this year," said Ronnie J. Wynn, president of Colonial Mortgage Co. in Montgomery, Ala., one of the largest mortgage companies in the country.
Wynn said the pickup in applications so far this year has come for both refinancings and original loans.
Lower interest rates - reflecting the Federal Reserve's desire to jump-start the economy by easing credit - have been accommodating, especially for many first-time buyerswho might not have qualified for a loan under the higher rates.
As of February, the most recent month for which data is available, a family earning a median income of $35,819 had 114.5 percent of the income needed to qualify for conventional financing covering 80 percent of a median-priced home costing $94,800. That same month sales of new homes were up 16.2 percent and existing homes were up 7.9 percent from a month earlier.
Mortgage rates on conventional 30-year fixed loans have remained below 10 percent for most of this year, dipping to a four-year low of around 9.25 percent in mid-February. They now stand at around 9.5 percent, vs. an average 10.37 percent in April 1990.
Adjustable rate mortgages look even more attractive. HSH Associates, a Butler, N.J., publication that compiles mortgage market information, said that by the second week of April one-year ARM rates averaged 7.34 percent, their lowest level since this type of mortgage was introduced in the early 1980s. Several lenders also were offering ARMs at initial rates as low as 5.87 percent, HSH said.
Many economists predict fixed mortgage rates will fluctuate largely within a range of 9.25 percent to 9.5 percent through the summer unless signs of inflation re-emerge, in which case, they could move higher.
Rates also could inch up after the economy moves out of the recession, which some economists say could start happening by this summer.
For now, many experts say the conditions are right for buying.
Less than two months ago, New York economist Elliott Platt had cautioned against plunging into the housing market, saying there still was room for prices and rates to fall further. Today he's changed his position.
"I think the bulk of the decline in prices is pretty much over. The market is stabilizing," said Platt, of the Donaldson, Lufkin & Jenrette securities brokerage.
As evidence, he pointed to a government report released earlier this week that said March housing starts fell 9.3 percent but that applications for building permits rose 2.4 percent.
Tuccillo said strong home-buying areas can be found in parts of the Midwest, South and West. Most of the Northeast still has a long way to go, he said.
"By and large, we're seeing the good market get better and the bad market turn around," he said. "Houses that might have been on the market for a year now seem to be selling."