HOUSING MARKETING

Home Sales*

Sales of new single-family homes totaled 853,000 units at a seasonally adjusted annual rate (SAAR) in the second quarter of 2000, down 8 percent from the previous quarter and down 8 percent from the second quarter of 1999. The number of new homes for sale at the end of June 2000 was 327,000 units, up a statistically insignificant 2 percent from the last quarter and up 7 percent from the second quarter of 1999. At the end of June, inventories represented a 4.9 months' supply at the current sales rate, up 20 percent from the end of the previous quarter and up 23 percent from the second quarter of 1999.

Sales of existing single-family homes for the second quarter of 2000 reported by the NATIONAL ASSOCIATION OF REALTORS^® totaled 5,067,000 (SAAR), up 5 percent from the first quarter of 2000 but down 4 percent from the second quarter of 1999. The number of units for sale at the end of the second quarter was 1,560,000, 16 percent above the previous quarter but 24 percent below the second quarter of 1999. At the end of the second quarter, a 3.6 months' supply of units remained, 16 percent above the previous quarter but 18 percent below the second quarter of 1999.

*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 second quarter of 2000 was $160,000, down a statistically insignificant 3 percent from the previous quarter's level but above the second quarter of 1999 by a statistically insignificant 1 percent. The average price of new homes sold during the second quarter of 2000 was $201,500, down a statistically insignificant 1 percent from the first quarter of 2000 but up 5 percent from the second quarter a year ago. The price adjusted to represent a constant-quality house was $192,300, up 3 percent from the first quarter of 2000 and up 6 percent from the second quarter of 1999. The values for the set of physical character-istics used for the constant-quality house are based on 1992 sales.

The median price of existing single-family homes in the second quarter of 2000 was $137,800, up 3 percent from the previous quarter and 3 percent above the same quarter a year ago, according to the NATIONAL ASSOCIATION OF REALTORS^®. The average price of existing homes was $175,300, up 3 percent from the previous quarter and up 4 percent from the second quarter of 1999.

**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 second quarter of 2000 shows that families earning the median income have 126.6 percent of the income needed to purchase the median-priced existing home. This figure is down 3 percent from the first quarter 2000 index and down 9 percent from the second quarter of 1999.

The second quarter 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 16 basis points from the previous quarter to an interest rate of 8.19 percent. The median price of existing single-family homes increased 3.2 percent in the second quarter. The median family income rose 1 percent during the second quarter of 2000.

Source: NATIONAL ASSOCIATION OF REALTORS®

Apartment Absorptions

There were 48,500 new, unsubsidized, unfurnished, multifamily (5 or more units in structure) rental apartments completed in the first quarter of 2000, down a statistically insignificant 16 percent from the previous quarter but up a statistically insignificant 4 percent from the first quarter of 1999. Of the apartments completed in the first quarter of 2000, 75 percent were rented within 3 months. This absorption rate is a statistically insignificant 1 percent above the previous quarter and 6 percent above the same quarter in the previous year. The median asking rent for apartments completed in the first quarter was $790, which is unchanged from the previous quarter but a statistically insignificant 4 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 first quarter of 2000 totaled 268,000 at a seasonally adjusted annual rate, unchanged from the level of the previous quarter but 28 percent below the first quarter of 1999. The number of homes for sale on dealers' lots at the end of the first quarter totaled 129,000 units, 5 percent above the previous quarter and 41 percent above the same quarter of 1999. The average sales price of the units sold in the first quarter was $43,300, 6 percent below the previous quarter and 4 percent below the first-quarter 1999 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^TM (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 second-quarter value for the index of current market activity for single-family detached houses stood at 66, down 9 points from the first quarter and down 15 points from 1999's second quarter. The index for future sales expectations, 66, was down 7 points from the first-quarter value and down 15 points from 1999's level. Prospective buyer traffic had an index value of 44, which is down 3 points from the first-quarter value and down 13 points from 1999's second-quarter level. NAHB combines these separate indices into a single housing market index that mirrors the three components quite closely. In the second quarter, this index stood at 60, which is down 7 points from the first-quarter level and down 14 points from the value in 1999.

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