HOUSING MARKETING

Home Sales*

Sales of new single-family homes totaled 902,000 units at a seasonally adjusted annual rate (SAAR) in the first quarter of 1999, down a statistically insignificant 5 percent from the previous quarter but up a statistically insignificant 5 percent from the first quarter of 1998. The number of new homes for sale at the end of March 1999 numbered 302,000 units, up a statistically insignificant 2 percent from the last quarter and up 6 percent from the first quarter of 1998. At the end of March, inventories represented a 4.1 months' supply at the current sales rates, up a statistically insignificant 8 percent from the fourth quarter of 1998 and down a statistically insignificant 2 percent from the first quarter of 1998.

Sales of existing single-family homes for the first quarter of 1999 reported by the NATIONAL ASSOCIATION OF REALTORS^® totaled 5,037,000 (SAAR), up 3 percent from the fourth quarter of 1998 and up 8 percent from the first quarter of 1998. The number of units for sale at the end of the first quarter was 2,280,000, 39 percent above the previous quarter but 8 percent below the first quarter of 1998. At the end of the first quarter, a 5.4 months' supply of units remained, 38 percent above the previous quarter and 11 percent below the first 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 first quarter of 1999 was $154,000, up a statistically insignificant 1 percent from the previous quarter's level and above the first quarter of 1998 by a statistically insignificant 1 percent. The average price of new homes sold during the first quarter of 1999 was $186,000, up a statistically insignificant 2 percent from the fourth quarter of 1998 and up 3 percent from the first quarter a year ago. The price adjusted to represent a constant-quality house was $182,100, up a statistically insignificant 3 percent from the fourth quarter of 1998, and up 5 percent from the first 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 first quarter of 1999 was $131,200, less than 1 percent above last quarter and 4 percent above the first quarter of 1998, according to the NATIONAL ASSOCIATION OF REALTORS^®. The average price of $163,800 was up 1 percent from the previous quarter and 5 percent above the first 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 first quarter of 1999 shows that families earning the median income have 137.9 percent of the income needed to purchase the median-priced existing home. This figure shows no change from the fourth quarter of 1998 but was 2 percent higher than the first quarter of 1998.

The stable housing affordability index is the result of a less than 1-percent increase in the median price of single-family homes from the previous quarter being offset by a less than 1-percent increase in the median family income and an increase of only 6 basis points in mortgage interest rates from the fourth quarter of 1998.

The fixed-rate index decreased less than 1 percent from the fourth quarter of 1998 but increased 2 percent from the first quarter of 1998. The adjustable-rate index decreased less than 1 percent from the previous quarter but rose 3 percent from the same quarter a year earlier.

Source: NATIONAL ASSOCIATION OF REALTORS®

Apartment Absorptions

There were 49,000 new, unsubsidized, unfurnished, multifamily (5 or more units in structure) rental apartments completed in the fourth quarter of 1998, down 20 percent from the previous quarter and down a statistically insignificant 11 percent from the fourth quarter of 1997. Of the apartments completed in the fourth quarter of 1998, 73 percent were rented within 3 months. This absorption rate is a statistically insignificant 1 percent above the previous quarter and a statistically insignificant 1 percent above the same quarter in the previous year. The median asking rent for apartments completed in the fourth quarter was $772, which is a statistically insignificant 8 percent above the previous quarter and a statistically insignificant 8 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 fourth quarter of 1998 totaled 341,000 at a seasonally adjusted annual rate, a statistically insignificant 1 percent below the level of the previous quarter and 16 percent above the fourth quarter of 1997. The number of homes for sale on dealers' lots at the end of the fourth quarter totaled 157,000 units, 7 percent above the previous quarter and 8 percent above the same quarter of 1997. The average sales price of the units sold in the fourth quarter was $45,500, a statistically insignificant 6 percent above the fourth-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 indices of housing market activity. (The index values range from 0 to 100.) The first-quarter value for the index of current market activity for single-family detached houses stood at 80, down 5 points from the fourth quarter but up 11 points from 1998's first quarter. The index for future sales expectations, 78, was down 4 points from the fourth-quarter value but up 6 points from 1998's level. Prospective buyer traffic had an index value of 55, which is unchanged from the fourth-quarter value but up 4 points from 1998's first-quarter level. NAHB combines these separate indices into a single housing market index that mirrors the three components quite closely. In the first quarter, this index stood at 73, which is down 3 points from the fourth-quarter level but up 8 points from the value in 1998.

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