(FORTUNE Magazine) – From California to New York's Long Island, this land is once again made for home buyers and sellers. You may not see strong evidence in the next sales statistics -- it takes 45 to 90 days for the deals to close. But check out your local real estate agency: The people crowding in there aren't waiting for prices to fall further. They are bidding. Higher sales of existing homes will eventually spill over into new ones, whittling down the big unsold inventory and stimulating construction. The hammering and sawing, in turn, will help lift the rest of the economy. FORTUNE forecasts that starts of single-family houses will grow to a respectable one million annual rate in the spring of 1992. That is up sharply from a deeply depressed 719,000 in 1991's first quarter and just below the average of the late Eighties. Apartment and condo starts, however, hampered by years of overbuilding, should reach only a quarter million from a minuscule 194,000 -- the lowest level in at least three decades. The foundation of the single-family turnaround was laid last summer when declining mortgage rates teamed up with weakening home prices to make houses more affordable (see chart). War and recession fears aborted a comeback, but then -- as if General Schwarzkopf had issued a command -- in late January people started to march into the market with confidence. The fundamentals will sustain that confidence. A modest economic recovery will restrain home-price increases, which will at least be matched by income gains. Lower mortgage rates have helped the most to raise affordability, and fixed rates will stay well under 10% for a while. CONVERSATIONS with top real estate agents around the U.S. reveal that sales contracts are already proliferating as buyers and sellers see eye to eye for the first time in years. Even the downcast Northeast is looking up. Contracts in metropolitan Boston rose 70% in the first quarter from a year earlier. William Galvin, head of the Massachusetts Association of Realtors, cites pent- up demand from two-earner couples who have been renting and saving in recent years to meet bigger down-payment requirements. In New York City's suburban Long Island, says Lee Testa, whose Pine Hill Properties covers the region, ''buyers are stunned when they see four or five other people looking at the same time.'' Realtors are also rubbing their hands in Florida, Texas, and California, which together account for more than a quarter of U.S. single-family real estate activity. March traffic in Florida metro areas was ''exceptionally good,'' says Michael Owen, head of the state's real estate association and a broker with Arvida Realty in Boca Raton. Dallas and Houston remain strong. Chicago sales have rebounded too. California sales, though still well below the previous year's, picked up smartly in February and March. What's more, says Mack Powell, president of the California Association of Realtors, pending sales -- bids made and accepted -- are up in key markets. As in most other parts of the country, the action is greatest at the low to middle range. The same is true for builders. Kaufman & Broad Home Corp., California's biggest homebuilder, enjoyed a 22% jump in first-quarter orders for homes averaging $175,000 (modest by California standards). ''Today's consumer doesn't want yesterday's pricey brass fixtures or tile counter tops,'' says Kaufman CEO Bruce Karatz. Even in Beverly Hills, sales of $5 million homes remain sluggish; the action is hotter down among the $3 million economy models. With the exception of powerhouses like Kaufman & Broad, most U.S. homebuilders will have a tough time getting credit until the new-home inventory declines. But when they do start slapping together more bricks and sticks, the increase in jobs will be sorely welcome. The sustained pickup in multi-unit construction should come later as demand gradually sops up unoccupied apartments and condos. Meanwhile, the bubbling resale market will generate income for realtors and stimulate spending for home furnishings. Firmer home prices should also lift remodeling outlays as owners regain confidence that their investments won't go down the gutters. Once prices head up, the so-called wealth effect kicks in: When their net worth increases along with the value of their homes, people tend to spend a small amount of the gain. That, too, will help the economic recovery along.

CHART: NOT AVAILABLE CREDIT: SOURCE: NATIONAL ASSOCIATION OF REALTORS CAPTION: AN UPWARD PULL ON SALES? Preoccupied with war and recession, people weren't ready to take advantage of more affordable housing last year. Now they are.