‘For Sale’ Signs Springing Up in Homes’ Lawns : Housing: Realtors say the economy balances out rising rates, making it a good time to buy.

The markings of spring are here: Temperatures are rising, flowers are blooming, and “open house” signs are popping up in neighborhoods across the country.

It’s an annual rite. As the weather gets milder, families make plans to move on.

This spring, home-buying season begins on a cautious note because of rising interest rates, which have hiked the cost of financing a home. But the professionals who make a business out of selling homes insist prospective customers shouldn’t be scared away. They argue that rates remain historically low and home prices are relatively stable through most of the nation.

“It’s just a good time to buy. The economy is improving and interest rates are reasonably low,” said Robert H. Elrod, president of the National Assn. of Realtors, a Washington-based trade group.

He said fewer restrictions in federal home mortgage applications also will help buyers.

Elrod said recent rate hikes--initiated by the Federal Reserve Board to keep the economy from overheating and inflation from rising--”will only bring the undecided off the fence who want to buy soon before there’s another rate increase.”

By the end of March, the 30-year fixed-rate mortgage averaged 7.8%, according to a national survey by the Federal Home Loan Mortgage Corp., or Fannie Mae. That’s about three-quarters of a percentage point up from the start of the year and more than a point above the 25-year low of 6.74% in October, though still well below the double-digit levels of the late 1980s.

One-year adjustable rate mortgages averaged 4.6% for the initial year.

“Certainly rates are higher . . . but we’re also dealing with a very strong economy, more consumer confidence. One offsets the other,” said John Tuccillo, the realtors’ chief economist.

Robert Van Order, Freddie Mac’s chief economist, agreed: “I think the strength of the economy will be more important than the rise in interest rates.”

“If you think of housing as an investment, then one of the things people care about is not just the borrowing rate; it’s how much their homes are going to appreciate. The same thing that makes interest rates go up will make housing look good.”

Most economists say the economy will continue to grow at a moderate pace in 1994 while inflation remains low. While many believe rates will rise some more this summer, they predict rates should end the year at around the same level as they began.

The realtors group predicts an increase in home sales this year, forecasting 3.94 million existing single-family homes and 734,000 new homes will be sold. Last year, 3.79 million existing and 669,000 new homes were sold.

Industry professionals already are reporting healthy business. “Realtors are telling us they are seeing many more people at open houses,” said Gregory Samp, president and chief operating officer for Sibley Corp. in Rochester, N.Y.