Home Sales*

Sales of new single-family homes totaled 977,000 units at a seasonally adjusted annual rate (SAAR) in the first quarter of 2003, down a statistically insignificant 5 percent from the previous quarter but up 8 percent from the first quarter of 2002. The number of new homes for sale at the end of March 2003 was 339,000 units, unchanged from the past quarter but up 7 percent from the first quarter of 2002. At the end of March inventories represented a 4.1 months’ supply at the current sales rate, up a statistically insignificant 8 percent from the end of the previous quarter but down a statistically insignificant 2 percent from the first quarter of last year.

Sales of existing single-family homes for the first quarter of 2003 reported by the NATIONAL ASSOCIATION OF REALTORS^® totaled 5,830,000 (SAAR), up 1 percent from the fourth quarter of 2002 and up 1 percent from the first quarter of 2002. The number of units for sale at the end of the first quarter of 2003 was 2,310,000, 8 percent above the previous quarter and 10 percent above the first quarter of 2002. At the end of the first quarter, a 5-month supply of units remained, 16 percent more than the previous quarter and 9 percent above the first quarter a year ago.

Home Prices

The median price of new homes during the first quarter of 2003 increased to $180,200, down 5 percent from the previous quarter and down 5 percent from the first quarter of 2002. The average price of new homes sold during the first quarter of 2003 was $227,300, down a statistically insignificant 2 percent from the fourth quarter of the past year but unchanged from the first quarter a year ago. The price adjusted to represent a constant-quality house was $213,700, unchanged from the fourth quarter of 2002 but up a statistically insignificant 3 percent from the first quarter a year ago. The values for the set of physical characteristics used for the constant-quality house are based on 1996 sales.

The median price of existing single-family homes in the first quarter of 2003 was $161,500, unchanged from the fourth quarter of 2002 but 7 percent above the first quarter a year ago, according to the NATIONAL ASSOCIATION OF REALTORS^®. The average price of existing homes, $204,300, increased 1 percent from the previous quarter and was 7 percent greater than in the first quarter of 2002.

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 first quarter of 2003 shows that families earning the median income have 143.9 percent of the income needed to purchase the median-priced existing home. This figure is up 3 percent from the fourth quarter 2002 index and up 5 percent from the first quarter of 2002.

The first-quarter increase 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 decreased 21 basis points from the previous quarter to an interest rate of 5.90 percent. The median price of existing single-family homes increased to $161,533, a slight gain of 0.3 percent from the fourth quarter of 2002 and rose 7.0 percent from the first quarter of 2002. The median family income rose just 0.7 percent from the previous quarter and 1.8 percent from last year’s first quarter.

The fixed-rate index increased 2 percent from the fourth-quarter 2002 index and increased 5 percent from the first quarter of 2002.

Apartment Absorptions

There were 48,000 new, unsubsidized, unfurnished, multifamily (5 or more units in structure) rental apartments completed in the fourth quarter of 2002, down 23 percent from the previous quarter but up a statistically insignificant 1 percent from the fourth quarter of 2001. Of the apartments completed in the fourth quarter of 2002, 55 percent were rented within 3 months. This absorption rate is a statistically insignificant 4 percent below the previous quarter and a statistically insignificant 5 percent below the same quarter of the previous year. The median asking rent for apartments completed in the fourth quarter was $877, which is a statistically insignificant 2 percent below the previous quarter but a statistically insignificant 2 percent above a year earlier.

In 2002 a total of 204,700 apartments were completed, an increase of 6 percent over 2001. Of these, 59 percent were rented within 3 months, a 6-percent decrease from the previous year. The median asking rent was $905 per month, an increase of 3 percent compared with 2001.

Manufactured (Mobile) Home Placements

Manufactured homes placed onsite ready for occupancy in the fourth quarter of 2002 totaled 154,000 at a seasonally adjusted annual rate, a statistically insignificant 7 percent below the level of the previous quarter and 18 percent below the fourth quarter of 2001. The number of homes for sale on dealers’ lots at the end of the fourth quarter totaled 52,000 units, 7 percent below the previous quarter and 16 percent below the same quarter of 2001. The average sales price of the units sold in the fourth quarter was $52,300, unchanged from the previous quarter but 7 percent above the fourth-quarter 2001 price.

A total of 169,200 manufactured housing units were placed in 2002, a 12-percent decline from 2001. The 50,100 units on dealers’ lots at the end of 2002 were 15 percent fewer than at the end of the previous year. The average price in 2002 was $51,400, 5 percent more than the 2001 average price.

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 first-quarter 2003 value for the index of current market activity for single-family detached houses stood at 66, down 5 points from the fourth quarter but up 2 points from 2002’s first quarter. The index for future sales expectations, 63, was down 6 points from the fourth-quarter value and down 5 points from 2002’s level. Prospective buyer traffic had an index value of 43, which is down 5 points from the fourth-quarter value and down 4 points from 2002’s first-quarter level. NAHB combines these separate indexes into a single housing market index that mirrors the three components quite closely. In the first quarter, this index stood at 59, down 5 points from the fourth-quarter level but unchanged from the value in 2002.