Despite recent easing of mortgage rates and renewed interest in home buying, metropolitan Baltimore's housing market struggled through the first half of the year, with sales off by 16 percent and midyear totals below those of each of the past four years.

Through June 30, a total of 7,285 homes sold in Baltimore and in Baltimore, Howard, Harford and Carroll counties, down from the 8,679 homes sold in the first six months of 1994, the Greater Baltimore Board of Realtors said yesterday. Though sales were especially strong during the first half of last year, midyear totals have come close to or surpassed the 8,000 mark for each of the past four years.

For the month of June, sales fell 4 percent, from 1,884 to 1,805, the least severe monthly decline since August, the board said. Sales have been off each month for the past year.

The board reported that sales increased by 19 percent in Baltimore City and by 7 percent in Harford County, with the number of contract signings strong in those areas and in Baltimore County, assisted by local government programs offering help with closing costs and down payments and by tax incentives for buyers who renovate homes.

The shrinking regional decrease -- plus a 16 percent jump in the number of contract signings -- sales awaiting settlement -- signaled a turnaround that many expect will lead to an improved housing market during the second half of the year.

"Buyers are now finally making decisions," said Joan Ryder, owner of Joan Ryder & Associates in Bel Air. "There were an awful lot of lookers in the early spring, just looking and not making decisions."

The housing market has appeared even weaker than it might actually have been, especially in comparison with the first half of 1994, said Michael Funk, assistant director of the University of Baltimore's Regional Economic Studies Program. Sales had remained strong in the first half of 1994 even as interest rates on 30-year, fixed-rate mortgages were beginning to rise, he said.

"As rates went up, potential buyers realized it was the bottom of the interest rate cycle and made their moves quickly, then housing went to a slower pace in the second half of '94," he said. "This year will be the opposite. 1995 started with rates higher, and they've been coming down. We should have a more robust real estate market in '95, particularly in comparison with the second half of '94."

Sales during the second half of 1995 should surpass sales during last year's second half, bringing year-end totals about even with last year's sales, Mr. Funk predicted.

Interest rates on 30-year mortgages had peaked at more than 9 percent in December. Rates have dropped three-quarters of a percentage point since early May and last week remained at 7.75 percent, fueling sales, said Keith Gumbinger, a mortgage analyst at HSH Associates Inc., which tracks mortgage rates.

"Prices haven't improved, jobs haven't improved, personal incomes are not going up anytime soon," he said. "It's got everything to do with interest rates. It makes it easier to qualify, it gives a little bit of extra purchasing power."

Real estate agents and brokers said they're seeing signs of renewed interest in home buying, from the increased phone calls to their offices to the numbers of home shoppers at open houses. When a property was advertised with W.H.C. Wilson & Co. on a recent Sunday, the listing agent scheduled an impromptu open house after getting a dozen calls in a couple of hours, said Adam D. Cockey Jr., the agency's managing director.

The slight pickup in the market comes as welcome relief to agents such as Mary Marinelli, of ERA Robert Ward Realty in Bel Air, who recalled how a sharp decline in sales starting in the second half of last year "was like somebody turned the faucet off in September.

Now, she said, "There are more buyers out there looking. . . ."

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