        Your  Ability to buy a House ?



     WASHINGTON  --  The  typical  U.S.  family's
ability to  buy a house fell slightly in July and
is expected  to drop sharply in August because of
rising mortgage  rates linked to the Persian Gulf
crisis, a real estate trade group said Friday.   

     The National  Association of  Realtors  said
its housing  affordability  index  declined  from
102.9 in  June to  102.3 in  July. That  means  a
family with  a median income of $34,358 had 102.3
percent of  the income  needed to  buy a  median-
priced existing home costing $98,400.            

     The median income was $34,250 in June, while
the median price was $97,500.                                          

     The median  means half  of the families earn                              
more and  half earn  less, or  that half  of  the                              
houses sell for more and half for less.                                        

     However, Realtors  President Norman D. Flynn                              
said  mortgage   rate  increases  resulting  from                              
developments in  the Middle  East  will  cause  a                              
substantial  loss  in  housing  affordability  in
August.                                          

     ``First-time buyers  will get  hit  hardest.
Unfortunately, entry-level  buyers who might have
just qualified to purchase a home in June or July
may  now   find  themselves  priced  out  of  the
market,'' he said.                               

     Despite the  anticipated loss  of purchasing
power  for  August,  Mr.  Flynn  did  not  expect
housing affordability  to take  an extended fall.
The NAR  is forecasting  a  decline  in  mortgage                     
rates for  the last quarter of 1990, which should                              
boost buying power.                                                            

     Although the median price rose $900 in July,                              
the index decline was offset by a decrease in the                              
interest rate used to calculate the index and the
$108 gain in median family income.


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