HOUSING MARKETING

Home Sales*

Sales of new single-family homes totaled 842,000 units at a seasonally adjusted annual rate (SAAR) in the third quarter of 1998, down 7 percent from the previous quarter and a statistically insignificant 5 percent above the third quarter of 1997. The number of new homes for sale at the end of September 1998 numbered 292,000 units, up a statistically insignificant 2 percent from the last quarter and up a statistically insignificant 3 percent from the third quarter of 1997. At the end of September, inventories represented a 4.3 months' supply at the current sales rates, up 13 percent from the second quarter of 1998 and unchanged from the third quarter of 1997.

Sales of existing single-family homes for the third quarter of 1998 reported by the NATIONAL ASSOCIATION OF REALTORS^® totaled 4,773,000 (SAAR), unchanged from the second quarter of 1998 and up 12 percent from the third quarter of 1997. The number of units for sale at the end of the third quarter was 1,980,000, 11 percent below the previous quarter and 6 percent below the third quarter of 1997. At the end of the third quarter, a 5.1 months' supply of units remained, 9 percent below the previous quarter and 14 percent below the third quarter of 1997.

*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 1998 was $150,000, unchanged from the previous quarter's level and above the third quarter of 1997 by a statistically insignificant 3 percent. The average price of new homes sold during the third quarter of 1998 was $180,200 up a statistically insignificant 1 percent from the second quarter of 1998 and up a statistically insignificant 3 percent from the third quarter a year ago. The price adjusted to represent a constant-quality house was $175,000, up a statistically insignificant 1 percent from the second quarter of 1998 and up a statistically insignificant 3 percent from the third quarter of 1997. 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 1998 was $132,700, 1 percent above last quarter but 5 percent above the third quarter of 1997, according to the NATIONAL ASSOCIATION OF REALTORS^®. The average price of $165,800 was up 1 percent from the previous quarter and up 5 percent above the third quarter of 1997.

**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 1998 shows that families earning the median income have 132.1 percent of the income needed to purchase the median-priced existing home. This figure is 1 percent above the second quarter of 1998 and 5 percent higher than the third quarter of 1997.

The increase in the housing affordability index is the result of the median price of single-family homes remaining unchanged from the previous quarter coupled with a rising median family income of 1 percent and a decline of 12 basis points in mortgage interest rates from the second quarter of this year.

The fixed-rate index increased 1 percent from the second quarter of 1998 and increased 6 percent from the third quarter of 1997. The adjustable-rate index increased by 1 percent from the previous quarter and rose 4 percent from the same quarter a year earlier.

Source: NATIONAL ASSOCIATION OF REALTORS®

Apartment Absorptions

There were 54,900 new, unsubsidized, unfurnished, multifamily (5 or more units in structure) rental apartments completed in the second quarter of 1998, up 21 percent from the previous quarter and up 24 percent from the second quarter of 1997. Of the apartments completed in the second quarter of 1998, 71 percent were rented within 3 months. This absorption rate is 7 percent below the previous quarter and 8 percent below the same quarter in the previous year. The median asking rent for apartments completed in the second quarter was $731 which is a statistically insignificant 1 percent below the previous quarter but a statistically insignificant 2 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 1998 totaled 319,000 at a seasonally adjusted annual rate, a statistically insignificant 8 percent above the level of the previous quarter and 15 percent above the second quarter of 1997. The number of homes for sale on dealers' lots at the end of the second quarter totaled 152,000 units, 3 percent below the previous quarter but 28 percent above the same quarter of 1997. The average sales price of the units sold in the second quarter was $42,600, 2 percent above the previous quarter and a statistically insignificant 5 percent above the second-quarter 1997 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 indexes 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 77, up 4 points from the second quarter and up 16 points from 1997's third quarter. The index for future sales expectations, 80, was up 3 points from the second-quarter value and up 14 points from 1997's level. Prospective buyer traffic had an index value of 55, which is up 1 point from the second-quarter value and up 9 points from 1997's third-quarter level. NAHB combines these separate indexes into a single housing market index that mirrors the three components quite closely. In the third quarter, this index stood at 71, which is up 2 points from the second-quarter level and up 13 points from the value in 1997.

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