There's money for mortgages, but what rates!

The Boston Five Cents Savings Bank a few weeks ago was offering money to home buyers at 12 1/2 percent, plus 2 points. The rate was 2 to 3 percent below everyone else's, but there was a catch: The mortgage had to be at least $93,750.

"It was a shock to have a lender tell us we couldn't have a mortgage unless it was $93,750," says S. J. McDonald, a suburban Boston real estate broker.

Mortgage money still is available despite the sharp downturn in housing sales , real estate brokers say. In fact, they say, lack of mortgage money is not the problem today, as it was in the last deep housing crunch in 1973-75. The real culprit: superhigh interest rates being charged for it. More and more potential home-buyers cannot qualify for a home loan at today's interest rates.

Real-estate brokers, for example, are watching a lot of sales that they thought were firm fall through. "It really gets tough," says Kenneth Kerin of the National Association of Realtors (NAR), "because when a buyer signs a contract and then has to wait for the deal to go through, he may not be able to go ahead as rising interest rates price him out of the market."

People who qualified for 12 and 13 percent loans a few weeks ago, for example , are unable to pass papers at 16 and 17 percent.

"Some brokers say they aren't concerned about sales in April and May," adds Mr. Kerin. "They're just trying to hold together the sales they made in January and February."

On an $80,000 house today, a buyer has to put down at least $15,000 in cash. But to qualify for a $60,000 mortgage, the buyer would have to have a yearly income of $40,000 to $50,000.

"So instead of being able to buy a house for 2 to 2 1/2 times your annual income, which has long been the case, at these interest rates you're now talking more about 1 1/2 times your income," says Mr. Kerin.

For example, real estate brokers note that if someone is making $50,000 today , he probably expects to afford a house in the $100,000 to $125,000 range. Today he is often frustrated and is forced to take much less.

For lower-income buyers, interest rates -- now running from 16 percent up to 18 percent or more in some parts of the country -- are keeping a large number of people out of the housing market altogether.

"Buyers are not psychologically prepared to pay 15 to 17 percent interest on a home mortgage," says Ralph Pritchard of Chicago, president of the NAR.

What is making it possible for some people to buy a home today is the availability of innovative financing deals, including new types of mortgage instruments, instead of the usual long-term, flat-rate loans with which most people are familiar.

The effect on sellers has been for fewer people to market their own houses because they lack the contacts and knowledge to package a deal that a potential buyer can afford.

The current housing downturn, both new and used, is devastating.

"We're very concerned about the home builders," says Mr. Pritchard of the NAR.

"If they drop to some 800,000 new housing units in 1980, which is their worst projection for the year, we will be so far behind in supply that the demand, when it finally does break loose as rates eventually come down, will force used-home prices right through the roof," Mr. Pritchard declares.

The National Association of Realtors did a phone survey last week of 22 metropolitan areas around the United States. It found that, with few exceptions , housing sales were off 30 to 35 percent, on average. "On the down side, the worst places were in the Midwest, such as Chicago and Milwaukee, where the market is off up to 50 percent," says Mr. Kerin.

The brightest picture was in such areas as Tampa, Fla.; Dallas; and Denver, where housing sales were off an insignificant 2 or 3 percent when compared to this time a year ago.

Further, housing prices overall are remaining firm.

"We can't find any major breaks in asking prices," says Mr. Kerin. However, he adds: "Price appreciation now is about half what it was before the Federal Reserve Board moved last October to curb credit."

Clearly, home sellers have a feeling for what they would like for their property and many of them would rather take a wait-and-see attitude and not accept a lower offer unless it is absolutely necessary.

Another impact of high mortgage rates is the dropoff in corporate transfers. Clearly, people being transferred are unhappy about giving up a much lower mortgage, in many cases, and so they are reluctant to move. Also, corporations themselves are backing off from the transfer of some people until the market improves. Corporations often agree to make up the difference in mortgage costs to the transferred employee.

Meanwhile, the amount of equity inflation has created in the housing market is phenomenal. It is estimated that there are about 55 million houses in the US today, with a total value of about $2.3 trillion.

Mortgages now total about $735 billion; therefore, homeowners have an equity of about $1.565 trillion.

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