HOUSING MARKETING

Home Sales*

Sales of new single-family homes totaled 892,000 units at a seasonally adjusted annual rate (SAAR) in the third quarter of 1999, down a statistically insignificant 4 percent from the previous quarter but up a statistically insignigicant 4 percent from the third quarter of 1998. The number of new homes for sale at the end of September 1999 numbered 314,000 units, up a statistically insignificant 3 percent from the last quarter and up 9 percent from the third quarter of 1998. At the end of September, inventories represented a 4.9 months' supply at the current sales rates, up 26 percent from the end of the previous quarter and up 20 percent from the third quarter of 1998.

Sales of existing single-family homes for the third quarter of 1999 reported by the NATIONAL ASSOCIATION OF REALTORS^® totaled 5,257,000 (SAAR), down 1 percent from the second quarter of 1999 but up 6 percent from the third quarter of 1998. The number of units for sale at the end of the third quarter was 1,980,000 4 percent below the previous quarter and 7 percent below the third quarter of 1998. At the end of the third quarter, a 4.8 months' supply of units remained 2 percent below the previous quarter and 14 percent below the third quarter of 1998.

*Units in thousands. **This change is not statistically significant. Sources: New: Bureau of the Census, Department of Commerce; and Office of Policy Development and Research, Department of Housing and Urban Development Existing: NATIONAL ASSOCIATION OF REALTORS®

Home Prices

The median price of new homes during the third quarter of 1999 was $157,000, down a statistically insignificant 1 percent from the previous quarter's level but above the third quarter of 1998 by 3 percent. The average price of new homes sold during the third quarter of 1999 was $191,900 unchanged form the second quarter of 1999 but up 4 percent from the third quarter a year ago. The price adjusted to represent a constant-quality house was $185,300, up a statistically insignificant 2 percent from the second quarter of 1999 and up 6 percent from the third quarter of 1998. The values for the set of physical characteristics used for the constant-quality house are based on 1992 sales.

The median price of existing single-family homes in the third quarter of 1999 was $136,000, up 2 percent above the previous quarter and 4 percent above the third quarter of 1998, according to the NATIONAL ASSOCIATION OF REALTORS^®. The average price of $172,700 was up 2 percent from the previous quarter and up 7 percent from the third quarter of 1998.

**This change is not statistically significant. 1A constant-quality house has the same physical characteristics from year to year and its price is estimated using statistical models. Sources: New: Bureau of the Census, Department of Commerce; and Office of Policy Development and Research, Department of Housing and Urban Development Existing: NATIONAL ASSOCIATION OF REALTORS®

Housing Affordability

Housing affordability is the ratio of median family income to the income needed to purchase the median-priced home based on current interest rates and underwriting standards, expressed as an index. The NATIONAL ASSOCIATION OF REALTORS^® composite index value for the third quarter of 1999 shows that families earning the median income have 127.1 percent of the income needed to purchase the median-priced existing home. This figure is down 5 percent from the second quarter of 1999 and down 6 percent from the third quarter of 1998.

The decline in the housing affordability index is the result of changes in the marketplace. The national average home mortgage interest rate for existing single-family homes has risen 46 basis points from the previous quarter to an interest rate of 7.58 percent. The median price of existing single-family homes rose 2 percent in the third quarter. The median family income, rising less than 1 percent during the third quarter, has not kept pace with the increases in mortgage interest rates and housing prices.

The fixed-rate index decreased 7 percent from the second quarter of 1999 and was down 7 percent from the third quarter of 1998. The adjustable-rate index decreased 5 percent from the previous quarter and declined 5 percent from the same quarter a year earlier.

Source: NATIONAL ASSOCIATION OF REALTORS®

Apartment Absorptions

There were 55,200 new, unsubsidized, unfurnished, multifamily (5 or more units in structure) rental apartments completed in the second quarter of 1999, up 18 percent from the previous quarter but unchanged from the second quarter of 1998. Of the apartments completed in the second quarter of 1999, 71 percent were rented within 3 months. This absorption rate is unchanged from the previous quarter but a statistically insignificant 1 percent above the same quarter in the previous year. The median asking rent for apartments completed in the second quarter was $850, which is 12 percent above the previous quarter and 18 percent above a year earlier.

*Units in thousands. **This change is not statistically significant. Sources: Bureau of the Census, Department of Commerce; and Office of Policy Development and Research, Department of Housing and Urban Development

Manufactured (Mobile) Home Placements

Manufactured homes placed on site ready for occupancy in the second quarter of 1999 totaled 300,000 at a seasonally adjusted annual rate, 19 percent below the level of the previous quarter and 18 percent below the second quarter of 1998. The number of homes for sale on dealers' lots at the end of the second quarter totaled 110,000 units, 21 percent above the previous quarter and 22 percent above the same quarter of 1998. The average sales price of the units sold in the second quarter was $42,800, a statistically insignificant 1 percent below the previous quarter and a statistically insignificant 1 percent below the second-quarter 1998 price.

*Units in thousands. These are HUD-code homes only and do not include manufactured housing units built to meet local building codes, which are included in housing completions figures. **This change is not statistically significant. Sources: Bureau of the Census, Department of Commerce; and Office of Policy Development and Research, Department of Housing and Urban Development

Builders' Views of Housing Market Activity

The National Association of Home Builders (NAHB) conducts a monthly survey focusing on builders' views of the level of sales activity and their expectations for the near future. NAHB uses these survey responses to construct indices of housing market activity. (The index values range from 0 to 100.) The third-quarter value for the index of current market activity for single-family detached houses stood at 80, down 1 point from the second quarter but up 3 points from 1998's third quarter. The index for future sales expectations, 81, was unchanged from the second-quarter value but up 1 point from 1998's level. Prospective buyer traffic had an index value of 53, which is down 4 points from the second-quarter value and down 2 points from 1998's third-quarter level. NAHB combines these separate indices into a single housing market index that mirrors the three components quite closely. In the third quarter, this index stood at 73, which is down 1 point from the second-quarter level but up 2 points from the value in 1998.

Source: National Association of Home Builders, Builders Economic Council Survey