‘88 Housing Sales Rise to 9-Year Record

Sales of existing houses rose in 1988 to the highest level in nine years, but climbing costs caused buyers to choose lower-priced houses, a national real estate group said today.

The National Assn. of Realtors said 3.63 million single-family houses were resold in 1988 for a 2.9% increase from 1987, the highest level since 3.83 million in 1979.

It said sales of existing houses rose 11.4% in December from November to 4.09 million units at an annual rate.

Demand continued strong, but high prices and an increase in mortgage interest rates at the end of last year meant that the biggest gains were in lower-priced houses, the group said.

During 1988, a buying shift occurred in favor of the Midwest and South over the relatively expensive markets in the Northeast, John Tuccillo, the group’s chief economist, said.

“The demand for home ownership is being fulfilled at the lower end of the market,” he said.

‘Demand Is There’

“For the most part, people seem to be buying less expensive homes. The demand is there,” said Ira Gribin, president of the association.

Interest rates were moderately higher at the end of the year from early 1988 but did rise significantly from a dip in the spring.

The Federal Home Loan Mortgage Corp. said fixed-rate loans were at 10.77% and adjustable-rate loans 8.49% at the end of December, compared to 10.61% and 7.95% in January 1988.

December rates were up from a drop in early March, however, when fixed-rate loans were 9.85% and adjustable-rate loans were 7.53%.

The median price of an existing house nationwide fell last month to $87,700 from $88,000 in November but was up from $85,400 in December, 1987.

The median sales price in 1988 rose 4.1% from the previous year to $89,100.

The December rise in house resales was the biggest month-to-month increase since April, 1986, with the biggest increases in the pace occurring in the Midwest and South.

South Rises Again

Last month’s increase in sales followed three months in which the level was unchanged at a seasonally adjusted annual rate of 3.67 million units.

Sales rose 15.8% in the South, 10.4% in the Midwest, 4.5% in the West and 4.4% in the Northeast.

Median prices last month rose in the Northeast to $143,300 from $140,700 in November and rose to $67,800 from $66,700 in the Midwest.

Prices fell to $117,800 from $128,900 in the West and fell to $78,500 from $80,300 in the South.