The U.S. housing market enjoyed an unexpected upswing during the first four months of 1996, defying most economists' yearend assertions that it was tapped out.

And leading housing market indicators continue to climb despite rising interest rates, spelling a strong summer for the home lending market.

A significant change in the attitude of the American consumer is behind the recent increase in home sales, industry observers say. Consumers have finally begun to think optimistically, after several brutal years of highly publicized corporate downsizing and limited job prospects.

"People have stopped worrying about layoffs, and are picking up and going on with their lives," said Ken Goldstein, chief economist with the Manhattan-based Conference Board, which collects consumer confidence figures.

The Consumer Confidence index, which tracks Americans' outlook on the country's current and future economy, hit a six-year high of 104.8 in April before dipping slightly in May.

People who had been putting off buying and selling homes are now coming into realty offices, said Lila Larson, a broker with Century 21 Real Estate in Spokane, Wash. "Our office has been getting a lot of calls: people trading up, trading down, moving in, moving South. ..."

Currently, existing home sales are at their second highest level on record, a 21.6% increase from last year's figures, the National Association of Realtors reported.

Housing inventories, which spooked economists by hovering at dangerously high levels in February, have been revised to reflect healthier new home purchase figures, the Department of Commerce reported .

"People were selling their homes, we just weren't getting the reports," noted Dale Jacobson, a survey statistician with the department. New home sales also made a jump in 1996, most recently increasing 6.7% in April from the previous month.

Housing starts hit a seasonally adjusted rate of 1,519,000 in April, 6% higher than March's figures, and a 19% increase from a year ago. The most recent figures for mobile-home shipments also showed a 7% increase from the month before.

Trade-up buyers in the 45-to-54 age group have much to do with this year's increase in housing activity, said Herve Kevenides, director of the real estate consultancy business for Cres Financial Concepts, an investment banking firm based in Switzerland.

These buyers are snapping up homes that because of slow appreciation are priced at 1989 levels, he said. And they're purchasing now because they're expecting inflation to increase their home's value.

The increases in purchase activity will continue to be sparked by a growth in personal income, Mr. Kevenides added.

"For the past few years, employees did not get increases in wages, because that capital went to stockholders and company owners," he said. "With the skilled labor force getting tighter, we are seeing some rectification of these balances."

Income adjustment, he noted, is concentrated in the middle to upper income tax brackets.

But buyers seeking a bargain should move quickly, he noted, because there is a window of opportunity of only six months before home prices around the country rise substantially.

Although many economists expect the increase in housing activity to end with the summer, Conference Board's Mr. Goldstein is confident it is more than a summer phenomenom.

"The current housing market activity is not going to end in three months, it's going to end in three years," he said.

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