Housing production in the third quarter was at a high level, but somewhat flat compared with the strong performance in the second quarter. Permits were down, starts were up, and completions were down, but these changes were moderate or slight.

• Housing permits were issued at a seasonally adjusted annual rate (SAAR) of 1,587,000 housing units in the third quarter of 1999. This is down 1 percent from the second quarter and 2 percent from the third quarter of 1998. This is the second quarterly decline since the first quarter's peak of more than 1,700,000. Even with these two quarterly declines, permits for the first three quarters are 5 percent ahead of the first three quarters of 1998. Single-family permits were at a rate of 1,205,000 (SAAR) units, down 2 percent from the second quarter but up 1 percent from last year's third quarter. The two consecutive quarterly declines are not enough to keep permits in the first 9 months of 1999 from being 6 percent ahead of the first 9 months of 1998.

• Housing starts totaled 1,657,000 (SAAR) units in the third quarter, up 2 percent from the second quarter and up 1 percent from the third quarter a year ago. For the first three quarters of 1999, starts are 4 percent ahead of 1998's first three quarters. Single-family starts at a seasonally adjusted annual rate of 1,300,000 homes are down 1 percent from the last quarter but up 2 percent from 1998's third quarter. Single-family starts in 1999's first three quarters are running 6 percent ahead of the 1998 pace.

• Housing completions reached 1,620,000 (SAAR) units in the third quarter, down 2 percent from the peak level of the second quarter but up 7 percent from the third quarter of 1998. Completions for the first 9 months of 1999 are 11 percent ahead of 1998's first 9 months. This pace could make 1999 the best year since 1987. There were 1,283,000 (SAAR) single-family completions in the third quarter, down 4 percent from the second quarter but up 7 percent from the third quarter of 1998. Comparing the first 9 months shows that 1999 is 13 percent ahead of 1998.

• Manufactured (mobile) home shipments achieved a level of 363,000 (SAAR) units in the second quarter of 1999, down 6 percent from the first quarter's record level and down 2 percent from the second quarter of 1998.

• Builders sold 892,000 (SAAR) new homes in the third quarter of 1999, down 4 percent from last quarter but up 4 percent from a year ago. Until September, sales were above 900,000 for 10 of the previous 11 months. As a result, the first 9 months of 1999 are 4 percent ahead of the same period in 1998. It is still likely that 1999 will be the best year ever for new home sales.

• REALTORS^® sold 5,257,000 (SAAR) homes in the third quarter of 1999, down 1 percent from last quarter but up 6 percent from 1998's third quarter. Sales have been above the 5,000,000 (SAAR) level for the last 11 months, and the NATIONAL ASSOCIATION OF REALTORS^® still sees the potential for a record year.

• Depending on the series, movement in prices for homes decreased, increased, or stayed the same. The median price was $157,100, down 1 percent from the second quarter but up 3 percent from a year ago. The average price of $191,900 was virtually unchanged from the second quarter but up 4 percent from a year ago. Finally, the price for a constant-quality housing unit rose 2 percent to $175,200 from the second quarter, and increased 6 percent from the third quarter of 1998.

• The median price of an existing home was $136,000 in the third quarter, up 2 percent from the second quarter and up 4 percent from a year ago. The average price rose 2 percent to $172,700 and posted a 7-percent increase from last year.

• Inventories of new and existing homes went in opposite directions. The inventory of new homes increased 3 percent to 314,000 homes, while the inventory of existing homes fell 4 percent to 1,980,000. Relative to sales, the inventories will support 4.9 months of new home sales and 4.8 months of existing home sales. The rate of new home sales is up sharply because of the low September sales rate.

• According to the National Association of Home Builders (NAHB), its members are still optimistic, although somewhat less so than last quarter. The composite Housing Market Index is at 73, down from the second quarter's level of 74. Both of these are historically high and 1999 may see a new record for the NAHB index.

Multifamily market conditions are generally steady. Production of multifamily units (5+ units) is generally strong, with permits, starts, and completions up from last quarter. Absorption of new rental units and rental vacancy rates are steady.

• Multifamily permits were issued for 318,000 (SAAR) units in the third quarter, up 4 percent from last quarter, though down 12 percent from a year ago.

• Starts of multifamily units reached 322,000 (SAAR) units in the third quarter, up 19 percent from the second quarter and unchanged from a year ago.

• Multifamily completions were at a seasonally adjusted annual rate of 299,000 units in the third quarter, up 5 percent from the second quarter and up 9 percent from the third quarter of 1998.

• In the third quarter, 71 percent of the 55,200 apartments completed in the second quarter were leased-up. This is the same rate as the second quarter and 1 percentage point greater than the rate a year ago.

• Rental vacancy rates increased 0.1 percentage point to 8.2 percent in the third quarter. The 1999 rate is unchanged from the 1998 third-quarter vacancy rate.

HUD's field economists report that in the third quarter, sales and rental housing activity continued the strong performance of the first half of 1999 in their major markets. Single-family building permit activity for the first 9 months of this year was up in every region but the Northwest, where activity was off less than 2 percent from a very strong 1998 volume. The largest percentage gains in homebuilding were reported in the Midwest, followed by the Pacific, New York/New Jersey, and Southeast regions. Through three quarters of the year, the Atlanta metropolitan area remains the number one market in the Nation in single-family activity, with the Phoenix area number two.

According to local sources, sales activity for both new and existing homes during the third quarter was much stronger than this time last year. Reports of continued big increases in sales through the first 9 months are common. Sales in the Washington, D.C. area are 15 percent ahead of this time last year. Local sources report that sales in the Chicago area for 1999 will probably set a record for the decade. In the Southwest, sales activity in Albuquerque and Oklahoma City are at a record-setting pace. In Phoenix and Las Vegas, two of the country's hottest markets, sales activity is up substantially above last year and should set new records by year-end.

Multifamily housing building permit activity for the first 9 months is down in many regions compared with this time last year, while only the Southeast, Midwest, and New York/New Jersey regions recorded significant increases in the volume of new units permitted. The decrease in permit activity is a response to the large pipeline of apartment development that already exists in many areas. Demand remains very strong for new rentals throughout much of the country. Reports of occupancy rates of 94 percent or higher are typical in most major rental markets. The Dallas-Fort Worth area is number one in multifamily production so far this year, with more than 12,600 units permitted. In the Mid-Atlantic region, very active residential revitalization efforts are underway in downtown Baltimore, Pittsburgh, and Richmond. In the Miami area, multifamily activity is up almost 80 percent after 2 years of relatively low production. Demand for new rentals in the Chicago area is very strong, particularly for high-rent units. New luxury apartments in both the downtown and suburban areas are leasing up at a rapid pace.