HOMES: TOPPLING RATES STIR OPTIMISM

Steadily falling mortgage rates during the third quarter of the year have opened up the single-family home market in the Cape Girardeau area.

"Now is a great time to buy a home," said Barbara Baker of Town and Country Realty. "I haven't seen the affordability factor this good in 20 years."

Marta Green agreed.

"This is an excellent time to buy," said Green, president of Classic Real Estate Ltd. "The interest rates are attractive and there are a lot of homes available."

Depending on the down payment, area home buyers can obtain fixed-rate loans at as low as 8 percent.

"Fixed rates between 8 and 9 percent are common," said Baker. "You can get the 8 percent with some concessions, and there are many loans available for 8.25 to 8.9 percent."

Baker said her business has experienced a 10 percent increase in home sales during the past year.

Green said: "Several people have refinanced their homes. With the rates like they are now, some people are looking toward larger homes. They're finding they can purchase larger homes in many cases without increasing their payments.

"Although the fixed rates range between 8 and 9 percent, you can obtain one-year adjustable loans for 5.9 percent," said Green.

Green and Baker agreed that home prices have remained stable during the past six months.

"We still need more homes in the $65,000 to $85,000 range," said Baker. "Plenty of homes are available in the higher price range."

Carl Blanchard, president of the Cape Girardeau Board of Realtors, said: "Our figures from multilist show that area home sales are up considerably over a year ago. Activity is a lot better this year, both in Cape Girardeau and Jackson."

Blanchard, of Coldwell Banker Blanchard and Associates Realty Inc., said realtors were expecting continued good sales through the fall and winter due to the attractive interest rates. "We do need more inventory in certain price ranges," he said. "We're seeing a lot of buyers."

Blanchard said his firm has experienced sales increases at the double-digit level in 1991.

The median price of a home in the Cape Girardeau County area is $56,000 to $58,000. Median price means half of the homes cost more and half less.

This is well below the median price range $76,300 throughout the Midwest. The median price home in the U.S. is $99,800, down from the $102,200 of a year ago.

The National Association of Realtors, in its monthly report, said the Housing Affordability Index shot up by almost 5 percentage points during September.

The index, which measures the ability of a family earning the median income to purchase a median-priced resale home, was 116.1 in September. The August index was 111.2.

NAR president Harley E. Rouda said the current affordability conditions, namely low interest rates, are the best they have been in 14 years.

"Objectively speaking, home-buying conditions couldn't be better," said Rouda. "And, as mortgage rates continue to fall, more buyers will be drawn into the market."

New-home sales are also increasing in the Cape Girardeau Area.

"New housing is on the upswing," said Green. "We work with Randol Development in new homes. Things have really picked up during the past two or three months."

This is evidenced in home permits issued by the city over the past three months. Only 30 new-house permits were issued the first half of the year, 28 permits were issued during the third quarter, and eight more were issued in October, for a total of 36 over the past four months.

The homes represented a combined cost of $4,070,000, an average of $113,000, with eight of the homes valued at $225,000 or more.