European Stars and Stripes (Newspaper) - February 14, 1990, Darmstadt, Hesse                                The National association of realtors says the typical american filly has an income of about $33,480 and can afford a median priced Home about $93,000. This House in the Atlanta area Sells for about $260,000. Some Are by i new Home prices outpace inflation by John d. Mcclain associated press using Industry officials in the United Stales doubt Home prices will decline significantly in the near future but falling mortgage interest rates mean both the Overall Cost of buying a Home and monthly payments Are dropping the median Price of a new Home this year will be $127.200. Compared with $120.000 last year according to figures compiled by the mortgage Bankers association it says the median Price of an existing Home will be $96.500 in 1990, up from $92,600 in 1989. The median Price Means that half of the Homes Cost More Hall less some analysts say that while housing prices May be tailing or leveling Oil m some areas they Are not declining on a National basis. Jay Shackford. A vice president of the National association of Home builders notes there Are thousands of housing markets around the country each of which has its own dynamics driving it different economies rates of growth types of households so that prices might be rising in some areas while falling in others. Overall. Shackford says the Home builders expect prices nationally to increase at or slightly More than the general inflation rate. The labor department s consumer Price Index was up 4 9 percent at an annual rate through last november new Home prices should continue to outpace Ella lion. While existing Home prices should Rise at about the rate of  says David Berson chief economist for the Federal National mortgage association. According to John Savacool a real estate economist with the wefa group a Bala Cynwyd. Pa., forecasting organization the last time Home prices fell at the National level was during the depression in the 1930s " writing in the current Issue of the National association of Home builders builder Magazine Savacool notes even following the Stock Market crash in october 1987. When 25.000 people lost their jobs in the new York area Home prices simply went Flat Lor a year. They did not decline on an annual basis " other studies however suggest that with the aging of the baby Boom and fewer births in the subsequent baby bust Era. Demand for housing will decline causing proper values to drop As Well. But whether Home prices will or will not decline falling interest rates Are making monthly mortgage payments smaller and thus affordable for Mere people. Federal Home loan mortgage corp. Weekly surveys show rates for 30-year fixed rate mortgages dropped from 11.22 percent last March to 9 78 percent by year s end. For a person financing a $75,000 Home a 10 percent rate translates into monthly loan payments of about $658, compared to about $714 for a rate of 11 percent according to the Home builders. For someone financing a $150.000 Home the lower rate reduces total monthly principal and interest payments from about $1.428 to $1.317. The mortgage Bankers association forecasts that interest rates will continue to drop this year to 94 percent on an annual basis. Fannie Mae s Berson also expects interest rates to continue to Drift downward for a few More  the National association of realtors Index measuring the ability of a typical family to buy a Home stood at 105 8 last november. That meant that a family with a median income of $33,482 had 105 8 percent of the income needed to buy a median priced existing Home costing $93,000. The monthly principal and interest payment to finance that Home would total about 23 6 percent of that family s income the realtors said. Another advantage of Home ownership is that the mortgage interest payments Are totally deductible from Federal income taxes. Only 10 percent of the interest on most other Loans can be deducted this year and none will be permitted in subsequent years. But while moderating interest rates tend to help prospective Middle income earners Many first time buyers Are unable to qualify financially for a typical starter Home. The realtors most recent affordability Index for first time buyers shows that during the third Quarter of 1989, first time buyers had Only 71 percent of the income needed to move from renting to owning. And even if they earned enough to make the monthly payments Many Are unable to raise the s-to-20 percent Down payment now required for Many mortgages. The Home builders said the Home ownership rate for households in the 25-29 age group fell from 43.3 percent in 1980 to 35.4 percent by mid-1989, and from 61.1 percent to 53.7 percent in the 30-34 age group. Here Are the average sales prices Lor new and existing houses in 32 major metropolitan areas during the third Quarter of 1989, compiled by the National association of Home builders from material provided by the . Office of thrill supervision Atlanta Baltimore Boston Chicago Cleveland Columbus Dallas it. Worth Denver Detroit Greensboro Honolulu Houston Indianapolis Kansas City los Angeles Louisville Miami Milwaukee Minneapolis new York Philadelphia Phoenix Pittsburgh Portland Rochester St. Louis Salt Lake City san Diego san Francisco Seattle Tampa Washington average $154,300 156.400 170,200 128.900 107,600 115,200 148,100 149,900 116.100 113,200 205,000 105,400 116,300 112,500 206,700 92,400 114,600 127,500 137,300 190,000 133.300 119,300 95,900 115,100 108.000 101,400 105,800 190.900 221.400 153,900 102,900 193,200 137,800 Page 14 stars and stripes Sis Sharon ludic my my my wednesday be